Starter home versus dream home

The current property market means that first time home buyers now have more options, which leaves them wondering if they should buy their dream home right away.

Due to property pricing and steady interest rates many first time home buyers are wondering if they should just opt to buy their dream home right away and skip buying a starter home, this however is best determined by the buyer’s affordability and individual needs.

‘While all buyers would probably prefer to buy their dream home straight away, many may not be in a financial position to do so and there are advantages to starting out small and building up. Buying a smaller starter home could allow them to build up equity in that home, which will help them to upgrade to larger property in the future,’ says Adrian Goslett, CEO of RE/MAX of Southern Africa.

Another factor is that the property your purchase should be seen as a long-term decision, and the buyer could save money by compromising on unnecessary features. Goslett says that many first-time buyers are young couples and executives and that buying a starter home might give them a chance to build up their income and affordability ratios in order to afford a higher bond repayment and bigger property when the time comes.

‘Living in a starter home will also give the buyer a chance to assess what features they want in their dream home and what they don’t, as well as get a handle on the different responsibilities and expenses that accompany homeownership,’ he says.

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