When purchasing your new home, your decision should be driven by two main goals: finding a place where you are happy living for years to come and finding a place that is a strategic investment for when you choose to sell down the road. While you may want to jump at the first house with an open layout, fireplace, and big backyard, there are some other factors that you should consider to ensure that your purchase is a wise investment. Ideally, you’ll find a home that allows you to achieve both of your goals: comfort and investment.
Neighborhood and School District
The old adage “location, location, location” has stood the test of time and remains true today. The most important feature of your home is where it sits. This feature is so important, because it is a fairly permanent factor in your home’s value. You can renovate and upgrade the structure of your home all you want, but there isn’t much you can do to fix your home’s location if it isn’t in a good area. A few things to check out when evaluating your home’s location are: crime rates, price trends, local parks, accessibility to transportation, and distance to amenities like grocery stores and convenience stores.
Another very important neighborhood factor to research is the quality of the local school district. Even if you don’t have children, The quality of the school district could have a big impact on the median value of homes in your neighborhood, and it could also influence the decisions of buyers when you sell your home years down the road.
After evaluating the neighborhood of your new potential home, take a look at the structural soundness of the property. A home inspector will be able to help you make a determination about most of the structures in the home. It’s a good idea to request special focus on the following: foundation, plumbing, roof, HVAC, and termite damage or other pest damage.
These features make up some of the “bones” of the property, and ultimately making repairs on those issues can cost quite a bit of money. Re-painting walls and re-surfacing floors are relatively inexpensive projects that will make any home look nicer, but if you’re forced to fix old pipes, or replace a roof after a short time in your home, the return on your investment will take significantly longer to recoup. If the home has a few issues, you don’t necessarily have to decline to purchase it. However, you can use those issues as negotiation opportunities to secure a lower price for the property.
Opportunities to improve
Another factor to search for while looking at potential homes is the opportunity to improve the value of the property. If you find a home that is in a great location and has great “bones,” you can maximize your investment by noting projects that would make it even more valuable. For example, if the exterior paint is a bit chipped, some of the interior fixtures are outdated, or the landscaping could use some work, you could get a discounted price for a less than perfect home, and make improvements to get a strong return on your investment. Before you go to re-sell your home, give it a fresh coat of paint, make sure the yard is well-maintained, update the fixtures, and re-surface the floors. Those projects sound like a lot of money when they’re all listed together, but if they are done over time, the cost could be very manageable and the return on the home could be significant!