I’m not suggesting that you try to get into the head of the seller when you’re buying a home. This is about thinking of the other end of the home ownership cycle; the sale. Of course, you could just find a home that you love in a neighborhood you love, and buy it. Most buyers do just that. However, what if you could identify more than one home you would be happy to own and conduct your comparison on the factors that will influence the sale when you’re ready to move on. There are even online sources I will mention later in this article and that take all the guess work out of the equation and give you all the information to protect your investment.
Whether it’s five years, 10 years, or longer before you’re ready to sell, compare your top two or three home choices with resale in mind. Sure, it can be as simple as counting on the in-demand neighborhood still being in demand when you’re ready to sell. This can be reasonable, especially if the neighborhood is well-established and has been in demand for many years. However, what if it’s a newer area, recently developed, and it could just be the “hot” area right now. Will it still be the place people want to live years into the future?
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Spend some research time in checking out the reasons people are buying in the area. If it’s due to a recent expansion of a major employer, what are the chances of that employer expanding again in the future? What are the chances of that employer running into business downturns and laying off employees? This could be a concern if there is no other major employer nearby. You don’t have to become an economics professor, but you can take factors like these into account when you’re making an investment of this size.
What about the current functionality of the home in comparison to new ones being built? If you’re buying in a very old neighborhood and the homes are vintage and in demand for that reason, this isn’t a big factor. Buyers want the older look, and will buy even if the latest and greatest features can’t be incorporated in the homes. However, if it’s a home of a newer vintage, how does it stack up to what buyers want in a new home?
If you start out with one needing significant upgrades to compare better to new homes, you may find that in a dozen or fewer years when you’re ready to sell that it’s way out of the features-in-demand group. It’s then not old enough to sell with vintage character, and a little too functionally obsolete to command a great price when you’re ready to move out.
Of course, you want to buy a home you love in an area in which you want to live. However, taking these factors into account could make a major difference in value appreciation over the years. I have found that the best tool for assessing all the surrounding concerns of a house is through RealtyTrac.com. I can quickly and easily gain sales data and trends, evaluate schools, compare rental rates, and much more through this website. I urge you to try a free 7 day trial today and let me know what you think.
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