Starter Home vs. Forever Home: Pros and Cons
When you’re buying a property, besides checking your real estate agent’s qualifications, you’ll also need to decide upon the type of home you want. If you have a lower budget, are keen on doing renovations and are only planning to live there for a few years before selling, a starter home could be what you need. On the other hand, if you are prepared to pay top dollar to get the exact home in the perfect location, then it could just be the forever home you are looking for.
But like with all types of purchases, there are plenty of pros and cons for both! Come with us and let’s explore both options!
Pros and Cons of Buying a Starter Home
Starter homes are a popular choice with younger first home buyers. Most often a smaller sized two-bedroom house, townhouse or condo starter home has lower purchase prices and is targeted at young first home buyers.
The pros of purchasing a starter home include:
- Affordability – starter homes traditionally cost less, which if you will be applying for a mortgage, means you need to save only a smaller deposit. You’ll be able to purchase your first home a lot sooner than you may have thought!
- Building home equity – while living in your starter home, it is likely to rise in value. You can release this equity when selling.
- Lower maintenance costs – a home with a smaller footprint costs less to maintain in both time and money.
- Save money on bills – a smaller home costs less to cool and heat, saving you money on electricity and gas bills. A smaller mortgage repayment is also likely.
The cons of purchasing a starter home include:
- Smaller property – with a smaller footprint, your new home may not have your preferred second bathroom and extra bedroom.
- Concessions are likely – regardless of their real estate agent qualifications, your agent is unlikely to find you the ideal starter home, making compromises in location, size, and design likely.
- Repairs – starter homes do tend to require some remodelling and repair work, which can prove costly if DIY isn’t your thing.
Pros and Cons of Buying a Forever Home
Then comes the option of purchasing your forever home. Usually, this decision is made when the owners are ready to settle down and start a family, have chosen their ideal location and are not planning to relocate for work in the future.
The pros of purchasing a forever home include:
- Customisation – the joy of owning a forever home means that you know you are not planning on moving. You can add all the custom and personalised details you want!
- Room to grow – purchasing a home with a growing family in mind ensures that you have the space available for new arrivals.
- Community – you will be able to put effort into setting your roots in your new community, knowing that you intend to remain for many years to come.
- Lock in mortgage rates – you can lock in a low mortgage rate for the life of your loan.
The cons of purchasing a forever home include:
- Higher price – as a forever home is larger and meets most if not all your requirements, it is going to have a higher purchase price.
- More expensive to maintain – the larger the home, the more it will cost to maintain. What would have been a smaller job in a starter home is likely to double in both cost and time to maintain.
- Higher bills – from your mortgage repayments through to your energy usage, you can expect to receive higher bills to pay.
- Wait times – when searching for your forever home, you are unlikely to find it on the first day. Expect to spend plenty of time hunting for the perfect home, and with the additional costs (mortgage, closing costs and deposit) you may need to save for a longer period too.
Whichever type of house you do decide to purchase, be sure to take advantage of the knowledge and experience of your local agent when searching for your new home. Always remember though, to use a licenced agent, and feel free to ask for information on their real estate agent qualifications too!