So how do you know what’s going to stand the test of (a decent amount of) time? You’ve never done this before. You’re taking a leap of faith that you have the money, skills, and temperament to maintain the biggest purchase of your life so far.
We know—it’s scary. And overwhelming. But there is a foolproof formula to picking the right starter home.
1. Manageable monthly expenses
If you’ve been renting all your adult life, you’ll be surprised by how much owning a home actually costs. There’s a mortgage, real estate taxes (usually wrapped into your mortgage), insurance premiums, utilities, and the drip-drip-drip of maintenance costs. And here’s the fun part: All these costs usually increase with time!
“New homeowners are often not aware of how expenses can add up when they own a home,” says David Reiss, who teaches real estate law at Brooklyn Law School in Brooklyn, NY.
When calculating how much you can spend on a house, figure in all these costs, and then add a little more for unexpected expenses. Like replacing LED lightbulbs at $20 a pop. Or hiring a pro to prune that gorgeous oak in the backyard. Or maybe replacing your Grand Palais range that spontaneously combusted.
Make sure your final choice truly fits your budget. Got it? That may mean buying something smaller, older, or farther out than you originally intended.
2. Low maintenance
Maintenance costs are the great unknown in homeownership—the older the house, the more it will cost to keep running. So unless you have the handyman skills and desire to fix whatever comes up, it’s better for your starter house to be newer construction (less than 10 years old).
You may even want to consider brand-new construction, which costs more but whose parts are typically covered by a warranty. Standard coverage would be a one-year warranty for labor and materials, two years’ protection for mechanical defects—plumbing, electrical, heating, air conditioning, and ventilation systems—and 10 years for structural defects.
Whether you buy a new or existing home, don’t forget to hire a good home inspector to thoroughly identify potential problems.
“Even if the home buyers are handy, they may not want to be spending their time up on the roof looking for a leak or in the basement up to their knees in water,” Reiss says.
3. Room to grow
Your family may consist of a spouse and a golden retriever today, but even if you aren’t thinking about expanding, your nuclear unitcould look vastly different in a few years. You may add a baby or two, or you may decide to help care for your elderly parents. Since you never know what the future holds, buy as much house as you can reasonably afford. Talk with your lender and get pre-approval for the largest mortgage you’ll qualify for.
“A lot of first-time buyers have self-imposed limitations,” Temple says. “Talk to a lender, and at least know what your ceiling is.”
Use that purchase power to buy space, which is much more important than fancy finishes. You can always upgrade a drab kitchen and knock out a wall to create an open floor plan. But adding more square footage by popping the roof or pushing out an exterior wall is extremely expensive and a major hassle.
4. Easy transition
Change is hard, and moving is particularly stressful. So don’t pick a starter home that will drop you into a totally unfamiliar lifestyle and location far away from the people and activities you love.
If you enjoy grilling with old friends on weekends, make sure your new barbecue pit isn’t hours away from your buddies who, no matter what they say, will not frequently drive the distance to have a perfectly seared blood sausage with you. If art galleries and professional theater rock your boat, don’t buy a starter house in a community that doesn’t embrace those activities.
Most of all, buy a place reasonably close to work. A daily commute is time-consuming and expensive, and will soon get old if you’re adding two or three hours to your work life. Remember this. You’ll be glad you did.