The ultimate goal for many young people today is to get out of their parent’s houses or rented properties and into their homes. However, getting onto the first foothold of the property ladder is notoriously tricky, thanks to near-constant recessions and economic turmoil. Between that and having to save a sizeable deposit purchasing your first home is a challenge. In addition to these, you are faced with a couple of choices, you can either purchase a starter home to move straight into, or you can purchase land with the view to building a home. Both options should be carefully considered. Let’s take a look.
Buying a Starter Home
Homes are classified as starter homes for a reason; they require the buyer to compromise, usually in terms of size or location. The idea being that you live there for a few years, build up some equity and then move on to a bigger/better home. Buying a starter home has a few benefits; it is often the quicker option, so if you have a timeframe in mind and you want to be in your own home by a certain date, then this may be quicker.
Buying a starter home is also likely to be a little cheaper, and there shouldn’t be any hidden fees. Acquiring a mortgage is often easier than acquiring a loan to purchase land or build a property. Mortgages also tend to be seen as less risky, and the deposit needed to secure them can vary, too, thanks to several programs designed to make it easier for first-time buyers to get on the ladder.
When you purchase a starter home, you are somewhat limited in terms of location because starter homes tend to be found in the cheaper parts of town. That being said, you are still likely to have all of your desired amenities at your disposal. You can also choose to invest your money into renovating or remodeling the home to customize it to your needs.
On the other hand, finding the right home can be a long and tedious process. As mentioned above, a starter home does tend to mean making sacrifices and looking for compromises, but this is not always ideal for those with a list of criteria for things their home absolutely must have. The housing market is also super competitive. Even if you find a house that fits all of the criteria the likelihood of you being the only bidder is low; this means that you could miss out.
Finally, whilst there is a lot to recommend purchasing a starter house that you can move straight into, it also is not necessarily going to be suited to or customized to your needs. It might be necessary to renovate or remodel the home to ensure it works for you and your family. After spending money purchasing the home, you would need to find the funds to renovate, in which case, building your own home might make more sense.
Building Your Own Home
The second option to consider for a lot of potential homeowners is to build their own homes. Building, like buying, has its own advantages and disadvantages, especially for first-time buyers. When you choose to build your own home, you are afforded total control. You can work with a business like Beattie Development to choose a home and a floorplan that is going to meet your needs; their sister company Beattie Home Services, can take care of the maintenance needs and most DIY jobs around the house. There are also regulations that construction companies today have to follow, which means the homes are safer, and the maintenance needs should be minimal for the first few years at least.
Depending on a few factors, a new build is likely to be much more energy efficient, which often means that while building a home is often slightly more expensive, it can save you money in the long run because your energy bills and utilities are likely to be cheaper. The home is also more likely to be better for the environment too, which can be a selling point for a lot of people.
Finally, when you build your own home, you are in total control of its location. When buying a starter home, you have to compromise on the location oftentimes because the homes within your budget don’t tend to be in the best places. Obviously, purchasing land to build a property is also somewhat limiting, but you do have more control over the location in terms of the type of land you want to buy. If you want a property in a rural area with great views, you can purchase the land. You will need to think about how easily you can develop on the land.
That being said, there are a few things that you will also need to bear in mind. Buying land and developing on it is an expensive choice, and it will likely cost more than simply purchasing a home. Securing a loan can also be trickier because purchasing land to develop on is often seen as more risky. You need to think about your budget and what you can afford as a first-time buyer. Think about the deposit that you have; both forms of loans – mortgages and land – tend to ask for around twenty percent as a down payment.
Building a home is also, obviously, a far longer process than buying a home; depending on the specifics of where you are building, the ambition of the plans and the size of the construction team, it can take well over a year for you to see the finished product and be able to move in. This won’t be ideal if you have a timeframe in mind and you want to be in your new home by a certain date. The delays can also mean that you incur more costs by having to rent or find somewhere to stay in the interim until your home is finished.
The Final Verdict
For first-time buyers, the choice is really up to them, there are a lot of thing that they will need to factor into their decision-making process. The biggest deciding factor at the end of it all is the cost and what each buyer is able to afford. It really is a personal choice. So, make sure you take the time to weigh up your options to work out which one is going to be the best for you.
