Is It Time To Consider Your Starter Home?

Is It Time To Consider Your Starter Home?

What is a ‘starter home,’ and is it time you bought one?

Is it time for you to kick renting to the curb? If so, which type of property should you be buying? What role should a starter home play in your plan?

The Renter’s Dilemma

Renting isn’t cheap. It doesn’t look like it is going to get any cheaper anytime soon either. In fact, quite the opposite. Unless you can lock down a very long multi-year lease at an attractive rate, you face constant increases.

There is no question that current market factors make this a unique and very attractive chance to buy a home. But what do you buy? Despite low interest rates and modest house prices, many renters don’t see making the leap to owning cheap – at least not for homes that check all the boxes. So what do you do?

The Ease of Buying a Home

Even if purchasing your  dream home can appear a little frustrating, there is no question that it is pretty easy to buy a home today. Interest rates are still ridiculously low. That means waiting another couple years could ultimately mean paying a lot more for the same home. Of course, home prices are also likely to keep going up in most locations.

Fortunately, mortgages have become much easier to get. Some real estate companies that were offering seller financing and no down payment options in-house last year report that they have retired them due to the low and no down payment options available from regular mortgage companies and banks. FHA, VA, USDA, and a variety of Fannie Mae and Freddie Mac home loan programs now offer low and no down payment financing plans. Some loan programs and local assistance programs will even give homebuyers extra cash to make home improvements when they buy.

The Challenges of Buying a Home Today

Just because it is easy to buy ‘a home’ today doesn’t mean that there aren’t challenges. Specifically, it remains very challenging for many first-time homebuyers, and those re-entering the market to find a good balance between affordability and their dream home wish lists.

There’s no sense in getting buried in debt on a beautiful home you love that you may not be able to keep up with, even if someone will give you a loan for it. It’s really going to hurt when you have to move out. At the same time, few want to buy something that they won’t be happy in, or that may not be a great investment.

What’s a Starter Home?

A starter home isn’t a particular size or style of home. Any home could be a starter home. They actually signify the first property that people buy to get onto the housing ladder. Even most real estate moguls don’t buy their big multi-million dollar mansions until they have traded up a few times, and are making millions. However, it is those first few homes that help them get their dream home.

A starter home is a smart stepping stone to building equity and a savings. In a year or two, that home could produce $25,000, $50,000 or more.  That is in addition to the principal payment you put down.


Whether you are looking for your first home, or you are returning to home-ownership after a break, look for a smart starter home. Search for a property which is affordable and has appreciation potential.

If you really, absolutely can’t stomach buying what you can afford, invest in an income producing property, or several which can give you the cash to buy the home you want to live in. Then you’ll have other renters paying for your dream home.

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