Buying your first home can be an exciting process, first time home buyers will need to make a lot of decisions that will affect their lives for years to come. Most potential home buyers dream of certain features they would love to have in a home.
How to Choose the Right Starter Home
Unfortunately, affordability often doesn’t line up with future homeowner’s dreams. It is critical to keep your budget in mind when searching for a starter home to ensure your decision will be the right one for you. Below are some tips to help you choose the right starter home and location.
Before choosing a home to buy, most people will get pre-approved for a home loan. It is common for lenders to approve applicants for more than they can comfortably afford. Just because you can afford the cost of a home on paper, you may not afford it once you factor in all of your other expenses. It is never wise to borrow the maximum allowed by the lender.
If anything changes in the future regarding your income, you may find yourself in a financial situation that will have you struggling to afford your mortgage payments each month. A good starter home should be one that doesn’t break your budget and leaves wiggle room for unexpected life expenses that are sure to arise at some point.
2. Location and Commute
When looking for a starter home, your next consideration should be focused on the location of your new home. The home you choose to purchase needs to fit into your lifestyle. If you attend a school or go to work, think about the commute you will have to take each day. The last thing you would want to do is buy a home that is too far from everything you care about. The cost of the commute and the time spent in traffic can lead you to be emotionally stressed out.
Consider what you want your home to have easy access to like parks, gyms, restaurants and other types of entertainment. If being located near water is important, consider finding a home near a lake or the ocean. If you live in Australia, consider purchasing your starter home in Geelong. It is southeast of Melbourne and has access to water, activities and the botanical gardens.
3. Think About The Future
When purchasing a starter home, most home buyers do not give much thought to where they will be in life in the next five or ten years. It can be a costly mistake not to consider your future when buying a home. For example, children should be taken into account if you don’t already have them. Having kids requires more space in a home to be comfortable.
4. Choose Maintained Property
Many home improvement shows available on television these days can make renovations look simpler than they are. This has caused a lot of people to buy starter homes that have not been maintained to save money by completing a lot of the work themselves. First time home buyers should limit their risks and buy a starter home that has been properly maintained and does not need tons of expensive repairs or upkeep.
5. Create An Exit Strategy
Starter homes are not meant to be forever. This means your decision needs to include thinking about the future. Choose a home that has the potential to be worth money if you decide to sell down the road. Pick properties that you can create an exit strategy for.
You may choose to sell or rent out the property for extra income. The last thing homeowners want to do is purchase a starter home they will not be able to sell when they are ready to move.
6. Check Local Rent Values
Even though you will be paying a mortgage and not rent, you should consider the rental values in the area of a home you are interested in for a starter home. In some areas, rent can be almost double the cost of mortgages. In other areas, it may not even break even. This is essential to take into consideration when creating an exit strategy.
7. Room For Growth
How long will your starter home be comfortable to live in? If you plan to accept promotions that will take you out of town, you may want to wait on purchasing a home.