Starter Home or Forever Home: Decide Which Is Right for You

Buying a home for the first time is a milestone full of excitement. However, it’s also full of important decisions. One of the first decisions you make is to choose between a starter or forever home. This brief guide from TC Strait / Mortgage Loan Officer will help you decide which is the better choice for you.

Considerations If You’re Starting a Home-Based Business

Whether you’re buying a starter home or a forever home, you may be considering a home-based business. Buyers who are starting a home-based business will want the built-in protection of an LLC. This limits liability in the event their venture hits a tangle. Operating as an LLC in Ohio through ZenBusiness also offers certain tax advantages, flexibility, and less paperwork.

Buying a home for the first time is a milestone full of excitement. However, it’s also full of important decisions. One of the first decisions you make is to choose between a starter or forever home. This brief guide from TC Strait / Mortgage Loan Officer will help you decide which is the better choice for you.

Considerations If You’re Starting a Home-Based Business

Whether you’re buying a starter home or a forever home, you may be considering a home-based business. Buyers who are starting a home-based business will want the built-in protection of an LLC. This limits liability in the event their venture hits a tangle. Operating as an LLC in Ohio through ZenBusiness also offers certain tax advantages, flexibility, and less paperwork.

Starter Home Defined

Living on the Cheap explains that a starter home is typically a property you purchase to get started as a home buyer. Most people only plan to stay in that home for a brief period, typically no more than five years. The purpose is to give you a chance to dip your toe into the real estate world and learn more about being a property owner, which is why most starter homes require less repair or renovation.

It may work best to continue renting while saving for a forever home, skipping a starter home entirely. Start by doing some research online to see what properties are available and how much landlords are charging so you can determine what you can afford. You have plenty of options in Cincinnati, which has more than 200 houses currently for rent in a number of neighborhoods.

Forever Home Defined

A forever home is relatively self-explanatory. You typically purchase this type of home with the notion that you will stay in it for an extended period, if not the rest of your life. These homes require careful consideration. Sometimes forever homes require a significant amount of renovations.

Pros and Cons of a Starter Home

Beginning with a starter home, one major pro is that you can eventually turn it into an investment property. You may choose to sell or rent the property after living in it. Because these properties are smaller, they cost less and require less upkeep.

If you plan on renting it, be sure to assess the local rental market first. You’ll want to consider the rental rates that comparable properties are listed at. This information will help you decide if renting it will work for your budget.

Size is one con of a starter home. You buy a starter home to fit the family you have, not the one you intend to have. If you purchase an “as is” home to save on cost, you may need to make substantial repairs. They can also be more difficult to sell unless you choose a popular location. High-demand areas significantly increase the cost of real estate.

Pros and Cons of a Forever Home

A forever home is more expensive and requires significantly more upkeep. However, it’s also the place you put down roots. You can customize it as you please and give your family plenty of room to grow. If you operate a home business, a forever home may be better suited for you as it will likely have space that can serve as your home office.

Keep Contacts In the Loop

Regardless of your decision, you will want to make your contact list aware of your new address. Shape an ecard with a free online card maker and send to family, friends and business associates via email or social media. This tool allows you to choose from among dozens of templates that you can customize with your own text, font type, and graphics.

Finding a Home and Mortgage

Before you think about what type of home you want, you have to consider what you need and what you can afford. Start by researching home prices in your area to get an idea. Reach out to a real estate agent who can help you find a home that meets your needs. Discuss price range and location and provide a list of must-haves.

Talk to lenders about mortgage rates that fit your budget. Be sure to understand your current financial state first. Experian points out that lenders will look at your credit score and if your current job pays well enough so you can afford your monthly mortgage payments.

Know What Features You Want

Consider in advance what you want in your new space. For instance, many people have smart home systems high on their list of priorities these days. Systems will need to be reset to factory settings. Fortunately, you can tap into troubleshooting tips on websites that offer how-to guides and helpful hacks.

Considering Home Insurance and a Warranty

Consider insurance costs as well. Homeowners insurance is a must, but it only covers specific damages, such as structural issues, theft, and injuries occurring on the property. If you want to protect home systems, such as HVAC, and appliances, you’ll need to go with a home warranty so that you will be financially protected. Before you choose a provider, read online reviews and find a policy that best fits the needs of your new home and budget. 

As you navigate the home-buying process, remember that even a forever home does not have to be permanent. You can incorporate some of the considerations for a starter home into your search for a forever home as well. More often than not, you will know what you want when you see it.