Starter homes offer a great opportunity for first-time homebuyers to invest in a property for the short term. You may find that a smaller home fits your budget now, allowing you to grow equity while planning for a larger home purchase down the road. If you are considering a starter home, here are some key things to look at as you shop.
While some homes come with unique features you love, you'll want to consider retail potential as you shop. For example, homes with an in-ground swimming pool or home theater room may be tempting, but those same features might be off-putting to potential buyers down the road. Work with your real estate agent to identify homes that have great resale potential. This will help ensure a better selling experience when you're ready to upgrade. Remember that the starter home you invest in now can grow in value to help you afford a dream home later on.
Location is always important when searching for a home, but you'll want to look beyond great neighborhoods in exceptional school districts. Take your morning commute into account as you shop. You may find that a long commute can make it difficult to enjoy your new home, particularly if the route you'll need to take is subject to a lot of traffic. Look at how close local grocery stores, restaurants, parks, and other local attractions are to the home as well. Living closer to these amenities can make living in a starter home until you are ready to sell a bit more palatable.
Your starter home should be an investment with potential to grow in value. It should also be a property that easily fits into your current budget, so take time to look at all the extra expenses that might be involved. Owning a home in an HOA community, for example, may not align with your budgetary considerations. Expensive HOA fees, property taxes, and other costs can quickly add up, and they can also reduce the amount of potential profit you can make when you're ready to sell. Talk to your real estate agent about your preferences for living in an HOA area and determine a maximum amount you are willing to spend on fees and taxes. This can help dictate where your search for homes for sale will begin.
Some starter homes, particularly those that are less expensive, may have some dated interior decor. As you begin to look at homes for sale, think about how expensive or difficult it might be to give the home a style update. You may be able to refresh wood paneling with crisp white paint or cover over old tile with a sleek wood laminate. Other features, such as oddly colored bathtubs or wall-to-wall shag carpeting, might require more money to replace. Make a list of features you might need to update or replace for each home you are interested in. This can help you determine which home might be least expensive to update for resale.