There’s a ton of factors that are very particular to each buyer that ultimately determine whether the home is the right one for you. The most important general factors I would submit to you as a first-time home buyer should revolve around budget, return on investment, and maintenance cost. Ownify helps erase the guesswork on that last one, which traditionally is a major pitfall for first-timers who get in over their head with early repair costs. Homes are expensive to maintain, and buying a home that doesn’t have issues when you close on it doesn’t mean there won’t be issues in the future. But purchasing through Ownify gives you the ability to have a partner in the investment that is like a big brother or parent who is capable of footing the bill should an expensive, surprise repair pop-up.
But, it’s still wise to look for a home that doesn’t have a ton of deferred maintenance, as homes in good shape will hold value better for the future. Don’t just think about repair cost, but think about how these features will be a selling point to future buyers, and you may not have to pay for them! Newer homes typically have less deferred issues, and a newish home is often a great choice for a first-timer for this reason.
Even though Ownify makes the maintenance cost less of a danger, you are still responsible for making a wise decision about the other two factors: budget and return on investment. The right home for a first-time buyer needs to fit a budget that accurately reflects your lifestyle and expenditures. Although owning a home is a fantastic investment towards the future, you don’t want to be cash poor after buying way more house than you can afford. Carefully weigh what is feasible for you to pay each month, and establish a ceiling that you don’t want to go past. You may be qualified for way more! But remember: this is your first home and probably not your forever home. So be realistic and practical in your choice of house price.
One tip I always offer to first-timers, or even folks who really don’t think the current market can even fit their budget for housing expenses, is get a roommate! As long as you aren’t purchasing for your family, the rationale behind getting someone to help you pay your mortgage is a no brainer! If a home is a stretch for your realistic budget, this is a way to both help a friend find a cheaper rent and to dramatically lower your cost every month.
Also realize things like HOA costs and taxes can vary from place to place, so keep a buffer in your budget for those variances. Ownify can help you run these costs on each scenario to give you a transparent expectation for how this home may or may not fit your budget.
The last super important factor to take into account for finding the right first home is return on investment. This is the biggest factor in my opinion that should determine if this house is the right home for you. Odds are, this first home will not be your forever home. I could be wrong, but the majority of the time you will grow your salary, your family, and your equity over time and upgrading to the next home will be inevitable at some point in the future.
So my advice is don’t only pick the one that is a good choice for you, but also will be a great choice for someone else in 3-5 years. This first home has to be seen as an investment, as you probably don’t have the budget to purchase that forever home yet. So find something you can build equity into by looking for homes that need cosmetic updates and minor upgrades. Only looking at the ones that have all of those things already completed will mean you are paying the top dollar for an ultra-desirable home. Better to get a good deal for your first home and be the one on the profit side of things when you do those updates yourself. Another pro-tip is to look in new construction neighborhoods for inventory that is available for a quick move in. If it’s a relatively new development, this may be an excellent way to build equity as they continue to increase prices over time to raise the builder’s profits. Built in equity booster! I’ve had several folks do this, and in 2 years they are sitting on over a $100,000 of equity!
It may not be the home you always dreamed of, but this is about making the smart choice to realize this home can both meet your needs and help you create wealth for a future purchase!
To reiterate: buying your first home isn’t just about finding the right location or finishes. Those things are awesome, but often you’ll end up overpaying for those commodities. The first home may not be the right one to do this on. Better to focus on budget, return on investment, and maintenance cost for this first home, as this will set you up for a bright future in home ownership!
Searching for your first home? Learn more about how Ownify works.