We all want to own a house someday. We all want to live in a property that we can call our own. But a certain dilemma that homebuyers often face today is this: should I buy a starter home or should I aim for the property of my dreams?
A starter home refers to a cheap property, may it be a small bungalow, a condominium, or a studio unit, that young homebuyers can totally buy right away – without breaking their bank. These properties may be located in low socioeconomic areas and therefore have lower value than other properties.
In the past, buying a starter home is the way to go. In the Philippines, many adults opt to live in the properties given to them by their parents or stay at the comforts of their family homes. But things change. Millennials have proven to be an ambitious and hardworking generation that according to a recent survey, 75% of future homebuyers would rather buy a premiere home right away.
But starter homes have its own perks, the reason why it has never left the real estate stratosphere, albeit the recent economic changes. Here are some of them:
- Lower mortgage – Starter homes are way cheaper than regular homes. A person who’s trying to save up or a young family who wants to have decent savings while sending children to school will definitely enjoy this type of deal.
- Your own nirvana – Who doesn’t want independence? With a starter home, you can effectively separate yourself from your parents. You can mind your own business without worrying about your landlord. It’s your personal nirvana.
- Fast pay off – Because it has cheaper mortgage, you can pay it off faster than regular homes.
- Resale – When you’re ready to throw a down payment on your dream home, you can easily resale your starter home and get some extra cash.
- Training – You can train yourself into the world of adulthood better with a starter home. You can practice basic home maintenance techniques or mortgage 101. Living in a starter home will help you prepare when the time finally comes to buy a brand new home.
But not everyone is cut out to have a starter home. Below are some of the questions that you have to ask yourself when you’re about to buy one:
Where are you right now?
Sure, having a solid three bedroom unit located at the center of the Metro can be handled by your current pay slip. But remember that life is a curveball and you might not know where you will be in the next few years. If you think things will get a bit rocky in the future and having a high mortgage home seems impossible, then opting for a starter home is not a bad idea.
How much can I afford?
It’s all about your paycheck. If you think your monthly wage can handle a condominium in Fort Bonifacio, then by all means, buy one. But if not – and you still have other wages to pay like a family to feed or student loans to finish – then choose a starter home.
How long should a starter home last?
It depends on how much you managed to save. Real estate experts say that a homebuyer should upgrade into a new home after five years. But there’s no need to rush. Create a financial plan that allows you to see when you will be able to buy a good home based on your savings.
Whatever path you take, what’s most important is that you’ll be able to live a property that you can call your own. Home is where the heart is, after all.
Image source: http://www.persquare.com.ph/for-sale/house-lot-calabarzon-region-4-a-batangas-lipa/house-lot-for-sale-in-batangas-lipa_16156 – RobWoo Realty
