Should I Purchase a Starter Home Before Purchasing my Dream Home?

Dream House | Harbord - The Home Insurance People
In the current real estate market here in BC, more and more people are wondering when or even if they will ever be able to purchase a home. If you’re thinking about becoming a first-time homebuyer, you’ve probably already asked yourself “should I purchase a starter home, or keep saving for my dream home?” Well, there are pros and cons to each option, so let’s go over them together.

Starter Home

When you imagine a starter home you might picture a fixer-upper, but that is not necessarily the case much of the time. Sure, your starter home could need some work done to it, but what it really is, is a piece of real estate that you can afford now. It might be a condo, townhouse, or small house that you will outgrow in a few years. When considering a starter home, you need to ask yourself if you can picture living there for at least 3 to 5 years. If the answer is no, then you may want to hold off. But if that’s imaginable for you, then purchasing a starter home can be a great way to get your foot in the door to the real estate market.

Pros
  • More affordable
  • Lower expenses (ie property tax)
  • Likely easy to resell
  • Possibility to rent it out in the future
Cons
  • It doesn’t check all your boxes
  • You will have to deal with more moves
  • End up paying for more closing costs
  • You will eventually grow out of it

Starter Home - Harbord - The Home Insurance People

Dream Home

A forever home should be a home that you can see yourself living in long term. It should check off most, if not all the boxes on your checklist. When purchasing your dream home, you can get settled in, relax, and never have to think about moving again for the foreseeable future. Of course, the main drawbacks you have to consider when considering purchasing your dream home is that it will likely be significantly more expensive, and you may have to wait a few more years before making the purchase.

Pros
  • Checks all your boxes
  • You won’t outgrow it
  • No moves in the foreseeable future
  • You can change it as you’d like without thinking about future buyers

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Cons
  • Longer wait to purchase
  • Prices and mortgage rates may be higher after waiting

Purchasing any type of home, whether it’s a starter home or your dream home, is very exciting! And no matter which you choose is right for you, it’s important that you spend only what you can afford, plan to own the home for at least a couple years and consider the possibility of resale. We wish you a happy house hunting journey no matter what type of house you’re looking for and be sure to get in touch us when looking for your home insurance!