Buying a home is one of those things that everyone dreams about. There’s something incredibly fulfilling about owning your own piece of real estate and knowing that you can do whatever you’d like to make a house your home. But a lot of people also get overwhelmed when it comes to actually shopping for and buying their starter home. There’s a lot to think about and nobody wants to make a mistake when so much money is involved.
The 5 Things to Look for in a Good Starter Home
The term “starter home” means something different to everyone, but for most people, it refers to a smaller, cheaper house that a young single person or recently married couple can live in for a few years until they save up enough for something that’s more conducive to building a family.
A starter home is not the perfect home for the rest of your life. You buy it with the objective of using it as a stepping stone. As such, you want to make sure you’re buying a house that will enjoy some healthy appreciation over the course of the next three to five years. But that’s not to say you can’t enjoy your starter home. A lot of people actually end up falling in love with their first home and then decide to stay for a much longer period of time.
Regardless of what you plan on doing, you need to be smart about the process of buying a starter home. Here are some of the top things you’ll want to consider.
- Affordable (Within Your Budget)
A starter home doesn’t have to be cheap, but it does need to fit your budget. Depending on how much income you bring in, your version of a starter home could differ (one way or the other) from what other people consider to be a starter home.
The key is to think about a starter home from an affordability perspective. There are lots of different rules of thumb, but personal finance expert Dave Ramsey has one of the best. He tells his clients and radio show listeners that they should be able to put 10-20 percent down on a house and that the monthly payment should be no more than 25 percent of their monthly take-home pay. If at all possible, you should try to do this on a 15-year fixed-rate loan, though most people have to go with a traditional 30-year mortgage.
For example, let’s say that you make $50,000 per year after taxes. This means you’re bringing in roughly $4,150 per month. Using the Dave Ramsey rule of thumb, your house payment should be no more than $1,037 a month. While you may be approved for more by the bank, you’ll thank yourself for staying below this threshold. Remember, you won’t be here forever – it’s just a starter home.
- Good Neighborhood
The next thing to think about is the neighborhood. Location is what gives a home most of its value and, considering that you’ll probably be selling within three to seven years, you want to buy in a neighborhood that’s attractive and growing in value.
It’s much better to buy an average house in a good neighborhood than a good house in an average neighborhood. People can always fix up a house, but they can’t fix a neighborhood.
- Good Bones
It’s very likely that you’ll have to do some home improvement projects when buying a starter home. There are no perfect houses, regardless of the price point. Having said that, there are certain projects you can take on and others that you should avoid.
You want your starter home to have good bones. In other words, you need a solid foundation, a good electrical system, a good HVAC unit, a roof that’s in good condition, properly maintained windows, and no history of flooding in the home.
Things like paint, flooring, countertops, and bathroom vanities are all elements you can improve over the years. Don’t worry so much about these cosmetic issues.
- The Right Square Footage
Square footage is a big deal. Not only is the value of most homes directly tied to square footage, but you’ll need to make sure you have the right amount of space for you and your family.
For example, let’s say you’re a young couple who has been married for a couple of years. If you know that you’re going to have kids within the next two or three years, it’s probably smart to buy with the expectation that you’ll need space for a little one. The last thing you want is to have to immediately sell as soon as you get pregnant.
- Minimal Landscaping
If you’re accustomed to living in an apartment or rental property where you don’t have to do yard work, you need to understand that living in a house that you own is totally different. Landscaping – both on the front end and on a continual basis – is expensive and time consuming.
It’s probably best if you avoid buying a starter home that has a ton of landscaping requirements. You’ll need some time to get your feet wet and it’s good if you only have to worry about mowing the lawn and pruning some bushes. Trying to keep a bunch of exotic plants alive and needing to mulch big beds every year can be a full-time job.
If you want, you can always improve the landscaping over time. Not only does this allow you to control how much responsibility you take on, but it also lets you add value to your property.
Let Green Residential Help
At Green Residential, we have decades of experience working in the Houston real estate market. Whether you’re looking for that perfect starter home or are finally ready to upgrade to your dream house, we can help you find exactly what your heart desires. For more information on how we can help, please don’t hesitate to contact us today!