Linoleum floors. Calling instead of texting. Live/Laugh/Love décor.
Older generations have styles and habits all their own. And while we’re ready to retire some behaviors, like multiple remotes for one TV, others have made a full comeback—looking at you mustaches, crocheting, and macrame. Even wallpaper is staging a revival.
Our nomination for the winner of the Habits of Previous Generations We Need to Bring Back Prize is: The Starter Home.
Most potential and first-time homebuyers assume that because we can no longer reasonably expect to purchase a $35,000 multi-bedroom home with 20% cash down, we can’t buy a place to live, laugh, love in.
Others see perfect décor, decanted cereal, and walk in pantries in influencer videos and unknowingly develop a skewed sense of what a “normal” home looks like for someone in their late 20’s or early 30’s.
Allison Boshell sees every day how these preconceived notions stand between many new buyers and their dreams.
“Starter home is not code for ‘shack.’ If anything, it’s the complete opposite. Does it have the 3-car garage you’ve been dreaming of? Likely not. Does it include 3,500 square feet of finished space with stunning hardwood floors? Also, likely not. A starter home is a home you can gradually add value to as you live there building equity.”
“Building Equity” are the magic words in home ownership. The concept is simple—as you pay into your mortgage the price you would get for selling your home is more than what you owe on your remaining mortgage balance. Over time the gap between what you owe and what your house is worth gets bigger, meaning your equity grows.
“You buy the home you can afford and build equity,” Allison explains. “Then in a few years, you sell your starter home, pull out your equity and use it to buy a nicer home. After a few years, you sell your nicer home, pull out your equity, and buy an even nicer home. Rinse and repeat until you love where you live!”
Stephanie Welter demystifies the benefits even further.
“When you’re renting you’re paying 100% interest, meaning none of your payment goes towards the equity of your home. You’re not retaining any of the payment, it’s just gone. When you own, a portion of your payment goes towards the principle, which is a fancy word for ‘pile of money you get back when you sell.’”
Rising house prices are another reason many people assume they can’t buy a starter home. However, as Stephanie points out, this is actually a strong argument in favor of investing in property.
“Homes have risen in value almost every single year, sometimes as much as 20% year over year. The combination of paying down the principle and the house appreciating in value is the most significant road to long-term wealth. Best of all, you don’t pay taxes on the profit when you sell unless you exceed $250k profit as an individual or $500k as a couple. You can use the money to buy your next house, invest, or travel! You can even tap the equity without selling via a cash out refinance or home equity line of credit (HELOC). Many people do this to make house improvements or pay for college. This would never be possible when renting.”
A starter home is so much more than a smart financial steppingstone: a first home or condo is a great way to practice all the skills required in home ownership.
“Social media has normalized the dream home beyond what is healthy, leaving many first-time home buyers or renters feeling like their dream home is mountains away,” says Allison. “Social media doesn’t show you all the nitty-gritty steps of achieving your dream home, and it certainly doesn’t provide you the education necessary to get there. That’s why we’re here, to show you the dream is possible.”
The best part is, your first property can take a variety of forms. Some buyers are eager to roll up their sleeves and try their hand at DIY renovations. Others want a move-in-ready condo with no yard work where they can focus on other priorities.
In your first home you learn how and when to change your air filters, patch drywall, fix minor plumbing problems, even how simple it can be to install a ceiling fan. As you learn what you’re capable of, make mistakes, and develop new skills you’re literally investing in yourself, making you a more confident and capable homeowner as you move on to larger spaces. Real world experience gives you a much better sense of your personal style and priorities you can’t get by saving “inspo” on Pinterest.
“A starter home is a chance for you to make your own art,” Stephanie says. “Pick your own tiles, paint, landscaping–it can be so fun! It’s not usually done all at once, it’s a labor of love over a few years. As equity builds, you can tap into it to do bigger projects like full kitchen renovations whether you are staying or selling.”
Allison likens it to ordering off an amazing menu. “It’s a starter, think of it as the appetizer home to your future entree dream home. Or if you’re more of a dessert person, think of it as the waffle cone that is going to support your plentiful ice cream scoops shortly thereafter! A starter home may not be loaded with all the bells and whistles of your dream or even ideal home, but it does so much heavy lifting bringing your dream home to fruition.”
