Buying a Starter Home: Should You Still Do It?
It was common to buy a “starter home” and eventually work your way up to buying bigger or better homes, but maybe now that’s not the case.
Its already hard to have obtained a down payment for a first home nowadays. So people’s thought process is to have patience and wait and save as much money as they can so they can buy a home, they actually want instead of buying a starter home and live there for years then move up to a bigger home.
It all boils down to the individual itself with their financial and personal situations, we’ll be able to give you the pros and cons to buying a starter home.
Owning a home comes with a new set of responsibilities, decisions, and circumstances. A benefit with buying a starter home would be that people feel that they have more stability in their life. They feel like they’re part of something bigger and are more grounded. When it comes to home ownership they tend to enjoy being at home more, having friends over, etc.
Con: Buying more than once means moving more than once
You might think you’re ready to buy a starter home. But, maybe it might be more reasonable to wait a couple years to buy a larger home, that way you’re able to stay in one place longer rather than buying a starter home and staying for just a few years.
Pro: Tax benefits
When it comes to owning a home, interest coming from your monthly mortgage can be written off, kind of like when you own your own business. If you spend $500 per month on mortgage interest, at the end of the year, you’ll be able to deduct $6,000 off your taxes.
When it comes to paying rent, you’re basically wasting money because it just goes to the landlord. A lot of people think buying a home is a big commitment and a hassle, but really you save money!
Con: Homeownership isn’t assured
As Millennials, we prefer to buy our own home by ourselves and stay single rather than marry at a younger age like the past generations. Divorce is very common, people are always moving for work and prefer to be on the go at all times. This is why a lot of people don’t want homeownership and find it as a big commitment. You feel stuck, if you happen to buy a starter home and a new opportunity arises, job transfer, divorce, etc. It’s a hit or miss, but sometimes in these situations you might not gain profit from selling your home.