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Lock and Load: The Almost Indecipherable 'Starter' Home

The 'starter' home concept was borne of a post-WWII housing shortage and belief in affordable suburban new construction as the surest route to securing the American Dream. It has since evolved to mean much more— older homes in need of updating (rundown even), modest one- or two-bed houses, condos, and townhomes. Nowadays, a 'starter' is more often a city home. We set out to test the term's limit of plausibility among active listings, and how, at the mercy of brokerbabble, its meaning gets watered down and perverted. Here's what we found:

This North Center home fits a certain definition of 'starter': one that implies entry into an exclusive community with desirable schools and the whiff of wealth. Problem is, $539K is far from 'affordable', even in North Center. One could far more easily drop anchor with a condo purchase and have little work to do in gussying it up for future sale. While this house presents fair looking and spacious interiors, it lacks the curb appeal of a half-mil listing.




So, this is the picture of a good 'starter' home and investment, eh? Don't get roped into thinking the two are synonymous. This $50K 3-bed happens to be in New City/West Englewood, one of Chicago's most relentlessly depressed and crime-ridden areas. So yes, you should be able to afford a purchase here with money left over for upgrades, and for all your effort you may just break even five or ten years down the road. Don't get us wrong, this area needs buyers. But it should be a labor of love and an investment in the community, not in yourself.



Along similar lines, minus the blatant push to invest, this West Englewood 5-bed tempts with an outrageously low ask—$32K—but offers less than stellar prospects for starting out. For one, it's gonna be pretty hard to do much dwelling in this dwelling with a long-term tenant. Sure, you could sit back and collect rent, and in a few years you'll be in the black. But you're interested in a 'starter' home—presumably to live in—not in building a portfolio of income properties. Oh, and it's a short sale— all the more reason to take a pass.

Are you getting a general sense that 'starter' is often used to peddle crap? It's one of the only ways to market and lend credibility to an otherwise unmarketable property— the kind of place that has four bedrooms, a garage, a yard, but has somehow sat on the market for a year at $35,000.

Due to the rampant use and abuse of 'starter' by realtors, and the differing priorities of first-time buyers, a firm practical definition is hard to come by. Whatever your definition entails, we'd caution you against assuming you'll score a quick and fruitful flip in the market's current state. Detach yourself from the investing mindset and buy something you truly like, 'starter' or not.