Starter Home or Forever Home: 8 Great Tips to Buy Your House

Starter Home or Forever Home: 8 Great Tips to Buy Your House

Are you considering purchasing your first home? And you are trying to decide between purchasing a home that would be considered a starter home. Be sure to check out the definition of what a starter home is versus a forever home. Let’s look at the advantages and disadvantages of a starter and forever home.

Starter House starter home or forever homes

A traditional starter home is generally a smaller single-family home, a  condominium, or a townhome that a first-time home buyer can afford but may eventually outgrow the home. A starter home may be more modest but in general service the basic needs of homeowners. A starter home may not have everything a home buyer wants in a home, but it is a good place to start and build equity so that the buyer can eventually move up.  An important thing to remember is that starter homes are on the lower end of the price point in their local real estate market.

The type of home can be fixer-uppers, older homes, or even entry-level brand new homes. If the starter home is a condo, there are pros and cons of living in a condo community that may be beneficial to a first-time buyer. Your real estate agent will be able to educate you on the different areas where you can purchase a starter home.

There are some buyers who decide to purchase a starter home with having a goal in mind of moving up to a bigger, more luxurious home. Or even a home located in a better area. Some people will stay in the starter home for years having decided the home is enough for them.

What Can You Afford?

starter home Before you begin looking at houses and trying to decide what you want to purchase your first home as to whether it be a starter home vs a forever home, you need to determine how much money you need in order to purchase a home as a first time home buyer. The real estate market is determined by the home prices and if they are appreciating.

It is imperative to meet with a lender to determine what you have for a down payment, and what you can afford a monthly payment to be. A lender will look at your debt to income ratio and determine the amount of a mortgage that you can afford. You want to disclose all your financial information to a lender to ensure that you do not fail to get approved for a mortgage.

Other factors that a lender will discuss with you are the monthly payment, property taxes, and home insurance which all are recurring costs. It is also a good idea to not spend ALL your money. Be sure to keep reserves in the event of a “rainy day”. Houses always need maintenance of some kind and by routinely staying on top of maintenance, the home will remain in good condition. Keeping homes free of deferred maintenance will ensure that home values will continue to appreciate.

Starter Home Benefits

Generally speaking, starter homes tend to be on the lower end of the real estate market’s price range, it may take less time to save for a down payment. A starter home may be a smaller home, but that is a great first house. By saving for a starter home and getting in the market, would enable you to start building equity soon rather than later.

By the time you may be ready for your forever home, you can sell it and utilize the equity towards the purchase of your new home. Another advantage to a starter home is that it will generally sell quicker than a forever home.

If you can afford to keep your starter home and utilize it as a rental property, that is an excellent way to obtain passive income.  You can decide whether you want to sell or rent it out. Remember by doing so, you will now be a landlord which can have its challenges.

Starter Home Disadvantagesstarter home

Starter homes are generally small houses. It is common for buyers who have purchased starter homes to outgrow them. Usually, these buyers get married, have children, and maybe a growing family, and therefore they need more space. A disadvantage of buying another home will require the inconvenience of selling and going through the home buying process once again. Additionally, you will be paying closing costs on a new home.  You definitely want to keep your future needs in mind when purchasing a home.

Forever House

A forever home will likely be a more expensive home or be considered your dream house. Forever homes are in general bigger homes and you may consider them to be your perfect home. You will need to have more money saved in order to cover the downpayment and closing costs. Additionally, the monthly mortgage payment will likely be higher. If you are searching for a home where the idea of moving every 5 years does not seem that appealing, then consider saving for your forever home. A forever home is a home that you may want to live in for the rest of your life.

Starter Home or Forever Home: 8 Great Tips to Buy Your HouseClick To Tweet

A forever home will likely be in excess of 2000 square feet and will be a bigger home.

Forever Home Benefits

When you purchase a forever home, you can fix it up the way you want and enjoy it for years to come. Generally, when a buyer purchases a forever home, it will be a larger home and have more square footage and the homeowners can enjoy their hobbies. There will likely be more space for entertaining as well. A forever home may take longer to sell because it will be in a higher price point.

Forever Home Disadvantages

Forever homes will generally be more expensive than a starter home. It could take longer for a buyer to get into the market. It may take longer for a buyer to save for a downpayment, and ultimately slow them from building equity. By the time a buyer has saved sufficient funds for a downpayment, they may be looking in another area because the property values have gone up. Because forever homes are larger, it may be considered too much house for a homeowner. Remember, the more square footage, the more upkeep.

Consider Potential Resale Valuestarter home

Regardless of what home you are searching for whether it is a starter home or forever home, you always want to consider the resale value of the property and consider the housing market. You always want to consider the community that you are moving into and pick the best community.

Whether the home is large or small, a home located in a highly sought-after community will likely appreciate at a faster pace. Keep in mind, it is always recommended to purchase a home in a  community that is located in a good school district. You want to keep in mind, that any home you purchase, you want to be able to sell the home in the future, so you always want to consider resale!

Your real estate agent will provide guidance about the neighborhoods and communities, and it is a good idea to Google the neighborhood. Regardless of what you purchase, you will appreciate the benefits of home ownership.

Final Thoughts

You need to take everything into account before you decide on your home search. You want to do the right thing when planning your future to avoid costly mistakes. Be sure to consider what the real estate market is doing, and how homes are appreciating during the current market. While the market is very competitive now, we are experiencing multiple offer situations and prices going over list price. Given the real estate market, it may be better to start with a starter home, and start building some equity. Unless you are set on purchasing a dream home, then they may take a little longer to achieve.

About the Author

The above article “Starter Home or Forever Home: How to Pick Your First House” was written by Sharon Paxson, one of the best Newport Beach CA Real Estate agents. With experience since 2005, representing buyers, sellers, and landlords, we welcome the opportunity to share our expertise with you and your real estate transaction.

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Sharon Paxson is a full-time REALTOR® with EQTY | Forbes Global Properties and has been specializing in residential real estate throughout the Newport Beach area since 2005 assisting Buyer’s, Seller’s, Landlords, and Tenants with their real estate needs.

If you are thinking about buying, selling or renting your home, condo or other Real Estate in the following areas including Newport Beach, Newport Coast, Corona del Mar, Huntington Beach there are thousands of Realtors to choose from. However, it doesn't cost you any more to work with a top Newport Beach CA Realtor. We welcome the opportunity to show you how we get outstanding real estate results with specific and targeted marketing. If you are looking for a top real estate agent who will make a difference you have come to the right place. Use this real estate website to learn about communities and homes for sale.


  • Newport Beach Homes for Sale/Sharon Paxson®
  • Newport Beach area buyers, sellers, renters
  • 1100 Newport Center Drive
    Newport Beach, CA 92660
  • 949-280-0681 | DRE 01501912


DISCLAIMER: All information, photographs & content contained on this site is the property of Sharon Paxson. You must obtain written permission from Sharon Paxson if you would like to use any of this content contained herein. Opinions expressed are those of Sharon Paxson and may not necessarily be opinions of past and present brokers. Articles may be time and date sensitive. All statistical information utilized to create market reports has been obtained from the CRMLS. Information Deemed Reliable but not Guaranteed.

Copyright © 2024 Newport Beach Real Estate

Scroll to Top