Weighing In on a Starter or Forever Home
Published | Written by Jerry Newman
The decision of whether to invest in a starter home in San Antonio or wait and buy a forever home depends on several factors, both financial and personal. It’s easier to decide when considering the pros and cons.
Moving Into Greener Pastures
You’re getting ready to take the next big step in living the American dream by jumping in with both feet into the status of homeownership. Only two-thirds of the US population are current homeowners, and this figure drops to one-third for adults under the age of 34. The first step of deciding on a home is determining whether you’re going to move into a starter home or a forever home.
Pros and Cons of Buying a Starter Home
Starter houses are typically two bedrooms or fewer, and most people only live in them for two to five years. The average price difference between a two and a three-bedroom house is approximately $20,000, making smaller homes more budget-friendly. Your starter home can be a future investment as a rental property or resold as you move on to your permanent dwelling. Smaller starter homes require less housekeeping and maintenance, adding to your cost savings.
On the other hand, starter homes are smaller and, depending on your family size and mode of living, can feel cramped. A starter home is also typically a bit older than a forever home. Many are known as fixer-uppers because they require repairs. Lastly, starter homes are becoming harder to sell because millennials believe the cost of homes is too expensive and are renting longer to save up and buy a forever home.
Pros and Cons of Buying a Forever Home
The average age of people who purchase a four-bedroom forever home is 33 to 37, and the main appeal is that they are planning to settle in for the long term. Staying for the long haul allows them to set up roots in the community and offer stability to their children. Forever homes in San Antonio are more spacious and have more amenities than starter homes, allowing you to have all the designs and features you desire.
The biggest obstacle to buying a forever home is the cost. It will take you longer to build up a down payment, and the monthly mortgage will put a bigger dent in your budget. A forever home is meant to be long-term and has a slower ROI, meaning it takes longer for your home to increase in value. Another downfall is that a larger house and yard have higher upkeep and utility costs.
Protecting Your Home Against Peril
Homeowner’s insurance is crucial to protect you against perils that damage the structure of your home. The average cost for home insurance is $1,250 per year, but your exact rate depends on your home’s value. Most homeowners will escrow their insurance and pay their premiums through the mortgage company. So is it worth it to have home warranty? Home warranties will cover appliances and home systems when they need repairs.
What Will Your New Home Be?
Buying your first home is a major decision you’ll make in your adult life. A starter home can turn into a sound investment over the years while you save for your dream home, but a forever home offers the security of permanence. Enlisting aid from a professional at San Antonio Real Estate can help you figure out your options.
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