If you ask a 25 year old what is the top most thing on his/her wishlist, then most of the time it would be owning a dream house. Everyone wants to move into their lavish dream home but money does put constraints at times. If you don’t move to your dream house then you will have to rent a house, but isn’t it a better idea to add the rent money to the EMI which you can pay after buying a dream house. This is the toughest question, as there is no or yes this answer. But, as there is a middle ground to everything, this problem also has it, it is called starter home. Let’s understand what is a starter house and what are the advantages of it over a rented house till you buy a dream house.
What is a starter house?
A starter home is a small home or a condo which a person can afford- which fits in a person’s budget- with or without major renovations taking place. A starter home may be amiss of some amenities like fixer-uppers or brand-new, entry-level houses. It is a house which meets all the basic necessities and this type of a house is available at a lower price in a real estate market.
Advantages of starter home
- Take Advantage of Low Interest Rates
Starter homes are mostly available at low home loan interest rate as the amount of the property is low. The amount is low which can be repaid in a shorter period of time brings down the interest rate in such cases. Starter homes gives you a chance to build your equity and save money.
- Save on Expenses
Buying a home involves continuous expenditure whether on utility, or maintenance. But starter homes do not include so much cost, be it property tax, maintenance or utility bills. Property taxes are lower as cheaper the house, lower the property tax and maintenance cost will also be minimal until you buy a fixer-upper. The money you save on these expenses can go into your house fund, ready to help you purchase your forever home.
- Resell When You’re Ready
When you have saved the money to buy a dream home, then you will easily get a buyer for a starter home due to the increasing demand of starter homes. According to the research, small houses move quickly to the resale market.
When to move into a starter house?
- When you don’t have enough funds to buy a dream house
- You want to save money for money for dream but don’t to pay rent
- Avail tax benefits
What is a dream home?
A dream home is also often termed as forever home, a home which you have always dreamt off. This type of home includes everything like a big balcony to a kitchen with utility area, bedrooms with well interior wardrobes, a backyard, perfect by location and carpet area as per your requirement. The best part about these homes is that you don’t need to change houses in the future as it has everything that you wanted.
When to move in dream home
- When you have enough money to buy a house
- You have a stable career, incase if you take a loan then you can pay the EMIs
- You want to start a family
- You like the locality and you want to live in forever there
Conclusion: When you are weighing whether to buy a starter house or a dream home always keep in mind that you should spend only what you can afford, don’t go beyond your budget, if not dream home then at least own a smaller home for a few years and also consider the resale option. Not to miss, keep ‘forever’ perspective in your mind as a house that will satisfy your needs forever will be your dream home.