
First time homebuyers may find themselves grappling over how much home to buy. Should they “settle” for a less desirable starter home knowing they’ll move in a few years or splurge for a more expensive forever home where they can stay for the next couple of decades?
First time homebuying tips often present the choice of starter versus forever home as one of budget, focusing on the purchase cost. First time buyers will not need to save as much for a down payment and closing costs for a less expensive starter home, and monthly payments will be less, too.
There’s much more to consider, so these homebuyer tips expand on the idea of initial outlays to offer a longer-term perspective.
Starter vs Forever Homebuyer Tips: Seek Out Market Advice
Some things defy prediction (worldwide pandemics?), but when it comes to normal cycles, experienced real estate professionals often have a clue. It’s worth consulting them about the local housing market before deciding on a starter or forever home.
A real estate agent can talk to you about an area’s growth and expectations for price appreciation. Are prices appreciating so quickly that you should get into starter home with savings you’ve already accumulated and start building equity, which will later help fund your forever home? Are prices growing slowly, so you can save a larger down payment just as quickly and forgo the expense of a starter home?
A real estate agent can also talk to you about whether your starter home might serve as a rental home in the future. Some homeowners choose to keep their starter home as a source of passive income rather than selling it to provide the down payment for their next home.
While you’re at it, you might check with a tax advisor, too. You can ask questions about the tax advantages of homeownership (you can probably write off interest expenses), the tax obligations that come with owning investment properties, and the risk of paying capital gains taxes if you sell your starter home before you’ve lived in it two years.
Starter vs Forever Homebuyer Tips: Consider the True Costs of the Starter Home

Starter homes may be a means of earning money through price appreciation and equity, but they also carry expenses. You may find those extra expenses make it more sensible to skip the starter home.
First of all, when you purchase the home, you’ll probably pay 3% to 5% of the home’s value in closing costs you won’t get back. These include fees paid to the lender, attorneys, and appraiser.
Plus, there’s the cost of the home itself. Starter homes are often older and in need of maintenance, repairs and upgrades. These costs do not typically offer a full return on investment, especially when inexperienced DIYers attempt renovations.
To total the costs of the starter home, add the closing costs and the cost of any repairs or upgrades. Subtract the total from the expected proceeds at sale to determine how much you may gain from owning starter home. Could you accumulate that much on your own to put toward your forever home instead?
Starter vs Forever Homebuyer Tips: Consider Your Experience
One advantage of owning a starter home is the experience first time buyers gain in navigating the home buying process and homeownership itself. A starter home may come with a price, but it also provides a wealth of knowledge.
After you’ve owned a home, you’ll know if you really enjoy yard work enough to purchase the forever home with the extra acreage. You’ll have a better idea of how much space you’ll need for your family. And you’ll know if you’ll truly use the formal dining room.
You can also be more assured of success, having previously been approved for home financing. You will know what questions to ask your real estate agent and your lender. You can negotiate a sales contract with more confidence.
When you’re planning to live somewhere for the next few decades, entering into the purchase with knowledge and confidence boosts your chance of landing in a home you’ll truly love.
Starter vs Forever Homebuyer Tips: There’s Another Choice
Many first-time homebuyers choose a middle ground with a larger or nicer home than they might need at the moment but one they don’t plan to keep forever.
Here’s a favorite among first time homebuyer tips: Visit True Homes! We offer brand new homes of all types – starter, middle and forever. Take a look at www.truehomesusa.com.