With so much change in the housing market, it’s natural to feel anxious about choosing the right property to purchase. If you’re a first-time buyer, it’s possible that your lifestyle allows for flexibility, so you should consider the advantages of selecting a starter home over a larger house, to begin with. These factors will help you to discern which solution best fits your personal circumstances and will benefit you most in the long term.
Cost
With the rising cost of living, it’s important not to bite off more than you can chew with mortgage repayments. Make use of an affordability calculator to estimate your ideal price range before beginning your search for a home. Location is also an extremely important factor since certain regions will offer you far more value for money than others. If you are open to relocation or you have a partner with whom you are splitting living costs, it may be possible to opt for a more expensive property right away.
Upkeep
Once you’ve found and purchased your home, it’s likely that you’ll want to add personal touches to the space. You’ll also need to maintain the property on a regular basis to avoid preventable damage. The related costs of this will automatically be far higher on a larger property.
You’ll also need to pay for homeowner’s insurance, so a property that is higher in value translates to higher monthly premiums. It’s vital to bear in mind that insurance does not cover damage related to wear and tear, so to save on unmanageable repair bills when appliances break or need to be replaced, invest in home warranty coverages for your appliances that will take care of these unforeseen expenses.
Long Term Potential
Choosing between a starter home and a forever home largely depends on your personal circumstances. If you don’t need much space, a starter home can offer you the security of homeownership and then provide rental income when you’re ready to move on. However, if you’re looking to get married or have children in the near future, you may want to opt for a property that offers more flexibility for growth and stability for your loved ones.
Equity
Equity is important to consider when purchasing a property since not all houses increase in value over time. Purchasing a starter home has the potential to offer benefits related to this since you’ll be able to borrow against the equity you’ve earned when paying off your mortgage. This means that once you decide to move on to your forever home, you’ll qualify for lower interest rates on your new mortgage. In spite of this, it’s imperative to choose a starter home that will grow in value or be easy to sell in the future.
Tax
The tax implications of the property you purchase should be considered before you decide which type of property you’re interested in. There are a number of tax breaks you’ll benefit from, such as the mortgage interest and SALT deductions. However, you’ll still be liable for property taxes which are tied to the value of your home as well as the state you live in.
When you’re ready to purchase your first property, it’s easy to become caught up in the idealistic view of homeownership. Taking a step back to perform thorough research and ponder your personal circumstances can save you time and money and prevent buyer’s remorse.
The Coffey Group services the property buying and selling needs of the residents of Sarasota and Manatee County. We aim to put our clients’ needs before our profits and value knowledge, honesty, loyalty, and trust above all else. To find your dream home, visit: www.thecoffeygroup.com
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