Your starter home will always have a piece of your heart. It was likely your first big purchase, and you feathered that nest to make it your own while it helped you build equity. But, as you’re probably aware, starter homes come with compromises. Perhaps you had to choose ample closet space over a big backyard. Or, maybe you bought your first home in a neighborhood that was a few miles from the one that you really were eyeing—you know, the subdivision with the stellar pool or golf course that feeds into a great school district.
If you’ve been thinking about upgrading from your starter home to your dream home, now is an ideal time to do just that. Simply put, the luxury home market is favoring buyers right now, and it’s a seller’s market for starter homes. It’s the perfect combination for those who are looking to upgrade.
But how do you know if you’re ready to take the leap? Here are six hints that it might be time to sell your starter home and move into a luxury home:
1. You Can Afford It
When you moved into your starter home, it was comfortable for your budget. But, since then, you’ve advanced in your career (congrats!), or maybe you’ve gone from being a single-income household to a dual-income one. If your improved income can help you afford a nicer home, it might be a good time to upgrade. Rates are projected to rise throughout the remainder of 2018 and into 2019, so buyers could potentially save thousands with today’s lower rates. Moving into a nicer area translates to a better resale value in the future, too. Just make sure to take into account the cost of increased homeowner association dues that come with a more expensive home. These dues help fund nicer neighborhood amenities, like pools and parks.
2. You’re Ready to Start Building More Wealth
Earning equity on a luxury home can help you build more wealth than the equity you’re building with your starter home. And depending on your debt-to-income ratio and rental rates in your area, it might make financial sense to keep your starter home as a rental property after you upgrade to your dream home. Renting out your starter home can provide an additional income stream. It can be a great financial move if you’ve already paid off your mortgage, or the market would allow you to rent it out for more than your mortgage plus annual maintenance costs.
3. Your Family is Growing, but Your Home Isn’t
Your starter home may have made sense when you were single or newly married. Then, you converted that spare bedroom into a nursery. Now, closets are starting to feel stuffed and you’re short on space. Maybe you’re even spilling over into a storage unit. A growing family, whether you’re planning or expecting, is a great reason to upgrade into a more spacious house. We’re not just talking kids either! If you’re planning to get a pet, you might think about upgrading to a home with a bigger backyard so you can throw the Frisbee around with Fido.
4. You Want to be in a Great School District
When you moved into your starter home, you might have loved that it was within walking distance of a few of your favorite bars or concert venues. But as a parent, your priorities have probably changed, and so too have your criteria for a great neighborhood. Moving into a top-notch school district—which has high graduation rates, good teacher-to-student ratios, and offers enriching extracurriculars—can be a great reason to upgrade into a luxury home.
5. You’re Spending a lot of Time on Pinterest
It’s no secret that homebuyers have wish lists. Your starter house probably checked most of the must-haves on yours. But what about those fantasy items you were coveting? If you’re spending your days scrolling social media ogling beautiful homes, you’re probably ready for an upgrade. You can have that open kitchen that looks like it was torn from the pages of a design magazine. And that master bathroom that rivals a spa? It’s all yours. It’s time to check off that wish list! Plus, upgrading sure beats dealing with the hassle of big-time renovations (think: permits and construction noise).
6. You’re Working From Home More
Workspaces have become more flexible, allowing employees to telecommute a few days a week or work from home entirely. Having a dedicated home office can help with with your efficiency and work-life balance. Don’t make your kitchen table work overtime. You’ve earned that home office.
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