Buying A Home?--- Invest Wisley
All too often I have clients who are looking on the Internet for their dream home. They put in their parameters of bedrooms, baths, basement, garage, and then the price. Up pops a multitude of choices. After weeding through the photos they call me and want to see some of them in person. I can tell on the way to a particular property that they are already in love with one or two before we even get there. How could that be? The photos.
Being excited about the purchase of a new home is a wonderful feeling. It is a pivotal time in your lives. Because you are entering into a major investment, you want to be as sure as you can that your return on that investment down the road will be as much as possible. Here are some things to keep in mind.
Location is a key factor in the value of a property. Certain items will almost always lower the value of a property. It is okay to buy into it, but you must keep in mind that when you sell, those same factors will still come into play lowering your return as opposed to other properties in the same neighborhood.
- Proximity to a busy road
- Proximity to commercial properties
- Power lines and/or towers
- One car vs. two car garage
- Basement vs. no basement
Also ask your realtor to investigate the overall neighborhood retention of value. You should also do your homework and research reputation of the schools. Check for a website in your state that gives school report cards. Homes in towns with schools of a higher caliber will command a higher price.
Another thing to consider is something in real estate called Regression and Progression. Now stick with me here.
Regression is when the value of a larger home is reduced by the influence of smaller surrounding homes.
Progression is when the value of a smaller home is increased by the influence of larger surrounding homes.
Essentially if you buy a smaller home in a neighborhood of larger ones, invest in keeping it updated and improved while living there, your return on investment is likely to appreciate more because of the influence of the larger homes.
While we don't have a crystal ball, we generally have an idea of how long we plan to stay in a house before moving on. If this new home is going to be a stepping stone to something better, it is critical that you don't get caught up in the exhilaration of opting for a property that will not appreciate in value within the time frame of your plans.
Also if you financially strangle yourself to purchase a house that on paper may be just within your reach, you may be hurting yourself in the long run. The inability to afford updates and improvements as you live in a home will yield a significant difference in your future sale price. It is much wiser to buy something more modest and comfortably affordable, and make changes that keep the home looking its best.
With so many choices out there, look beyond the basics of bedrooms, bathrooms, granite countertops and hardwood floors. Protect your hard earned investment by listening to your head and not your heart
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