Starter Home Basics (3 Top Tips)
Category Buying Advice
What is a Starter Home?
A starter home is a free standing house, town house, or flat that's within a first-time buyer's budget. It's a home you don't plan on living in forever, and one you plan on eventually outgrowing. Your starter home might be a fixer-upper, a new development or anything in between. Starter homes are usually where single professionals or young couples start their property ownership journeys.
Starter Home Benefits
There are so many benefits to buying a starter home! Buying a starter home can help you build sizeable equity to put down on your forever home or serve as a long term source of passive income. You can also redecorate, renovate, and refurbish to your heart's content! Your home is your canvas (just keep in mind that not all additions to your home will be a return on investment).
3 Tips for Buying a Starter Home:
- Decide On Your Exit Strategy: Before you buy your starter home, decide on what you want to do with the place once you're ready to upsize and move into your forever home. You can either sell it or rent it out. Some locations have a high rental vacancy rate and some don't, so do yourself a favour and research if your area is a good rental zone or a good resell zone before buying.
- Plan For Maintenance: It's essential that you take good care of your starter home. Homes take wear and tear damage over time and this can add up if not attended to. Keeping your property in good condition is key for resale value, and rental price. That's why we always recommend budgeting for routine maintenance from day one after moving in.
- Be Flexible: a starter home isn't forever, so you can make compromises on your dream home wishlist. If you find a place that checks every box and it's within your budget, thank your lucky stars. But if it doesn't, carefully examine your priorities and evaluate how important a swimming pool, games room, or wrap-around veranda really are.
How Much Should I Pay for a Starter Home?
How much you should pay for a starter home is entirely dependent on your budget. That being said, you can use average metrics to guide you - just remember that markets fluctuate all the time. In January of 2020 the average price first-time buyers spent was R982,000.00. In Jan '21 however the market looked very different with first-time buyers spending R1,138,000.00. If you're feeling uncertain that's okay, our experienced real estate agents are here to guide you through every step of the way.
Author: Paul Wasson
