Buying a starter home is probably one of the largest investments that you will ever make. That being said, it is important to make the right choices and buy for the right reasons when purchasing your first home. Because most people do not intend to make their starter home their forever home, there are some features that a starter home should absolutely have in order to flip your investment.
1. Buyer-Friendly Neighborhoods
When you are looking at purchasing a starter home, it is absolutely necessary to make sure that your first home is located in a buyer-friendly neighborhood. Because neighborhood appeal adds to the value of your home, it is important to choose a suitable location. If you don’t feel comfortable or secure in the neighborhood, you must understand that many other buyers will feel the same.
Not only is security an issue, but the condition of the neighborhood is an important consideration as well. When trying to resell your starter home, you don’t want buyers walking into a neighborhood that is ill kept. You will be reducing the selection of people interested in your house. This will create a supply and demand issue. If you have very little demand for the house, the price will need to be lowered in order to sell it.
Because equity is one of the most important things you need to gain from your starter home, you need to make sure that you are selective about the neighborhood you choose to move to. No one wants to live in a neighborhood where they cannot feel secure in their own home or where the area looks like a dumping ground. Remember this when you are thinking about reselling your home in the future.
2. Two Bedrooms or More
You can certainly choose to buy a starter home that has only one bedroom. However, you will be much better served by equity if you can purchase a home that has at least two bedrooms. The reason for this is that you are limiting your selection of future buyers when you buy a home that has only one bedroom. Your selection becomes narrowed to a single person or a family that cannot afford a larger home.
The best way to earn a return on your investment is to have a home that can offer many things to many people. This will help your selling power. Although you may not need more than one bedroom, someone else might and that will attract potential buyers to your home.
Your starter home should always include appliances. Because buying your first home is expensive, it is likely that you are putting out all of the money you have just to buy the house. It is difficult enough to come up with a down payment and closing costs, let alone have to purchase appliances to furnish your new home.
Always try to negotiate with the seller if they are unwilling to leave the appliances with the house. You may consider slightly upping your offer or offering to pay a portion of their closing costs if they leave the appliances. If you have a home without appliances, you are guaranteed to need a refrigerator and a stove; and a dishwasher if you can afford it. The average cost of refrigerator is $800 and the average cost of a stove is $600. That’s an additional $1400 out of your pocket. If you can negotiate an extra $1000 to your buying offer, theoretically you have saved $800.
When looking at your starter home, be sure to think of the future and what the resale capabilities are for the home. You should try to consider what other buyers may be looking for in a home, so that you will have a better potential for equitable return.