When you buy your first home or purchase your second, be it to upsize, downsize, or relocate, you’d be wise to think of it as an investment. That’s precisely what it is and maximizing your return on investment will depend on where you purchase and which home you buy. It’s the largest investment that the majority of people will ever make in their lives. It’s also got significant tax benefits, along with the ability to personalize the space to your liking.
Most people make the mistake of getting caught up in the excitement of buying a home, allowing desire to trump their logic. They find a home they fall in love with and don’t consider the future or rationalize their choice, both of which can easily spell trouble with a capital “T”. So, it’s very important to make a good, hard thought decision in order to get the most ROI. You’ll certainly be glad you did when it eventually comes time to sell later down the road.
Don’t Make these Home Buying Mistakes
Some buyers make certain mistakes which they don’t stop to consider when purchasing a residential property. First and foremost is location, which as the saying goes, is the single biggest factor in the value of a home. A three bedroom, two bath house in one place is worth a lot more when it’s near or on the water. Think heavily about location because you won’t be able to change that aspect.
“If you’re planning to sell your home, chances are good that you’re seeking a lifestyle level-up: you want to bring your home’s size, shape, features, location, maintenance and financial obligations into better alignment with your life – or your future. Making sure that you execute a home sale that actually does align your home with your life requires a lot of prep work.” —Forbes
Next, do not buy a home that needs fixing up just to get it at a lower price, that is, unless you are totally committed to make the necessary improvements. Some buyers do this, then find the reality of the costs, the endless list, and weekend robbing projects are simply not worth it. Last but not least, is buying at the absolute top or even a bit over your budget. It might get you the house you like the most, but it will put a financial strain on you and that’s going to be the case for years to come. Be realistic and mindful of what you can truly afford.
How to Choose the Best ROI Home
When you purchase a home, be it your first or second, think about it from an investment standpoint because that’s exactly what it is. You should be focused on the future instead of the now to make the right choice. Here’s what you need to consider:
- Choose a good location. Okay, we’ve already mentioned location, but it definitely bears repeating because it is the largest component to the value of a home. Try to look into the future, if it’s near an undeveloped area, that could mean unwelcome changes. Choose a good neighborhood because you won’t be able to change it.
- Learn about the schools in the area. It’s a fact that schools serving the area make a huge impact on buyers’ choices. While it’s impossible to know what the schools will be like in years to come, it’s a sound idea to purchase in a neighborhood with good schools.
- Buy at the bottom end of your budget. This likewise bears repeating because it will help to shape the quality of your life. Purchasing at or near the bottom of your budget will lower your monthly mortgage payment and will allow you to make key improvements which will instantly add equity and be great selling features.
- Don’t ignore flaws. A poor flow of floorplan won’t magically change and what’s undesirable to you will probably be to others when it comes time to sell.
- Involve a real estate expert. Do yourself a favor and enlist the help of a buyer’s agent to make the best choice and be educated about the market. Choose one that not only knows the area, but can understand your future objective and be able to help you achieve it.
The real key is to find a property in a desirable location that has an established community surrounding it. If you find a great home with a lot of empty space around it, check into possible developments that are in the early stages of planning with the local commission. Ask your buyer’s agent to find out if that land is off limits to development, because if it isn’t, there’s the possibility something that negatively impacts neighboring homes is a real possibility.