When it comes to real estate investments, we want to be fully sure we’re going to make the most out of it. First-time homebuyers might be inclined to buy a starter home, or rent a property first and save up for the home that’s going to be theirs forever.
If you can’t decide between the two, here are a few tips and considerations that will help you make up your mind.
Buy a starter home first
A starter home is a house you can afford now without compromising your funds. You’ll get to benefit from historic low interest rates, which will greatly impact your monthly payments.
Take advantage of this, and pick a home you can turn into a rental property as time goes by and you have enough funds to finance your forever home.
Save up for your forever home
This is the type of home you see yourself living in for the next 20 years. You might even pass this on to your children, turn it into an ancestral property of sorts. The thing about forever homes, however, is that it’s out of the league of most 20- to 30-somethings.
You can save up for your forever home by choosing to rent a reasonably-priced home for the meantime. As long as you have a clear set of goals as well as self-discipline, you’ll be able to finance your forever home. This might take a while, however.
You can also buy a starter home for now — a property that has the potential to appreciate and build enough equity you can put into your forever home. You can sell your home once you’re ready, but if the conditions aren’t ripe, have it rented out instead.
If the price difference between the starter home you’ve been eyeing and the forever home you’re interested in can be saved up in a span of year, you might want to hold your horses and wait it out until conditions are right.
If it’ll take you more than five years to save up for that price difference, however, perhaps it’s time to compromise and look for another property that’s right on the middle ground.
Remember, this is not an all-or-nothing game. You can still find a home that suits your needs for the meantime until you can finally purchase that home of your dreams.
Check out this link for more information and tips on homebuying.