Although most home buyers are not thinking about reselling the home that they are considering purchasing, it should be factored into the home buying equation. After all, a home purchase is an investment. Therefore, you should always consider the potential appreciation of any property. For most Americans, a home purchase is the single greatest investment in their lifetime. We discuss a few items to be on the lookout for when searching for your next home.
What to look for…
- Proximity to infrastructure: How close is the house to the grocery store? How about to dining establishments, shopping malls, or night life? All of these factors play into the potential marketability to future potential buyers.
- Proximity to high-end stores: Oftentimes, it is important to pay attention to which businesses are moving into an area. In particular, you should look for premium brands that cater to a more affluent population. Some examples of these stores would be Starbucks, Whole Foods, & certain luxury car dealerships such as Mercedes-Benz, Ferrari, BMW, & others. The reason that it is important to look for these premium brands is because these companies typically do extensive market research prior to moving into an area. If the results of this research indicates that the population moving into the area will likely purchase these luxury brands, then rising home values typically follow.
- A quite and safe neighborhood: Most buyers want to live in a neighborhood that is peaceful and safe. With this said, it is critical that homes located on busy streets or near commercial properties be avoided. Oftentimes, homes located in these areas take the longest to sell and typically sell for less.
- Critical systems are in good shape in a home: It is possible that you could be buying a home in a neighborhood that is seeing rising home values. While this is great news, the particular home that you are buying could potentially end up giving these gains back if critical systems are in need of replacement. Some examples of these major expenses include a new roof, HVAC system, windows , or foundation.
- Good school zones: Consistently good school zones are a factor that should never be overlooked. As a matter of fact, this simple criteria is a major component of the algorithm used for our investor clients looking to purchase residential income-producing properties. Even if you do not have children, this is a factor that you should always be aware of when purchasing a home. Top-rated school zones consistently rank at the top of desirable traits sought by prospective home buyers.
Needless to say, there are many factors that impact resale value. Even if you are buying your dream home, resale value should always we considered into the equation. For example, some homes that are located in country club communities with private equity memberships may seem to be like a great value due to their low price. However, the oftentimes hefty club membership dues are a significant challenge for resale. This results in a small pool of potential buyers and many days on the market.
As always, it is highly recommended that you consult a local and knowledgeable real estate agent to guide in the home buying process. He/she should be able to make you aware of factors that you may not have thought of. Furthermore, a comparative market analysis for recent trends in the neighborhood will also guide you in the decision making process.