Does it make more sense for you to buy a “starter home” or a “forever home” for your first home in NYC?

First, let’s define what we mean by those terms. 

Starter Home vs Forever Home 

A starter home is exactly what it sounds like. It’s intended to get you “started” with home ownership. You don’t intend to stay in this particular home for a long period of time (e.g. less than 5 years). 

Whereas a “forever” home is a place you’d like to stay in for as long as possible. You may even want to retire there! But at a minimum, you could see yourself staying there long term.

The Two Questions to Ask 

So how do you decide which one makes the most sense to aim for? 

There’s two critical questions to ask to help you uncover the answer.

First – why do you want to buy a place? Do you want to stop paying rent? Do you want to put down roots? Is it for investment purposes?

Second – how long do you think you’ll stay in the home itself?  

If your goal is to hurry up and stop paying rent and to (quickly) put down roots, then buying a starter home makes sense. 

So in this case, you’re going to aim for the most affordable home that would meet your short term needs. But you should also be more willing to make compromises for that affordability. If the home checks off most of your must haves, then it’s worth making a move on. You’re not looking for perfection, here. 

However, if you’re thinking of staying for the long term and you’re hoping to get a better return on your investment, then that’s an indication that you’re looking for more of a “forever” home. Or at least something you’re likely to stay in for more than 5 years. 

In this case, it makes more sense to stretch and get the best and biggest home that you can afford within your budget. That way, you’ll have room to grow into it and a long enough time horizon for your investment to pay off.

What If Nothing Fits My Needs Short or Long Term? 

If you’re finding that there’s nothing on the market that fits your short or long term needs, then that’s a signal that you probably need to wait a bit longer before you jump into the market. Or you may need to adjust your search parameters. Maybe you’re looking in the wrong areas for your budget or perhaps you need to realign your “must haves” in an apartment. 

Want some help hashing this out? Book a time to speak with me here – Schedule a Call