When you buy real state, you need to be mindful of it’s potential resale value. This is especially true for investors, planning to finance future projects with home sale profits. But how can you figure out what a house will be worth years from now? While there are a lot of factors that impact a home’s value, there are some simple things you should consider to determine whether or not a property is likely to give you good returns at resale. Let’s take a look.
Ask yourself these 3 questions to identify a great buy:
Will the home meet a family’s future needs?
Statistics show that home buyers typically remain in their homes longer than they anticipate. Consequently, many neglect to consider what could happen in the next decade or more that could make their home more difficult to live in. The “must-have” house that first-time buyers fell in love with might not be so accommodating as they have children, allow older children move back in or take in elderly parents who need support.
To make sure your property is likely to have a good resale value and that it appeals to a wide range of potential future buyers, opt for a home that can accommodate a family’s future needs. For example, a ranch style home gives a lot more mobility options than a two story. If you prefer a two story, a layout that has a bedroom and bathroom on the first floor can be a good choice. Considerations like these help you choose a home that will help you adapt to whatever life throws at you now and will be a good equity builder when it’s time to sell.
Would you be willing to buy other homes in the neighborhood?
Before you commit to a personal property purchase, you should always take a good look at the other houses on the block because they will impact your home’s value. Do neighboring homes have attractive curb appeal? Are they well-maintained? Do you notice neighborhood nuisances like lots of barking dogs or overgrown lawns? Could you live happily in this neighborhood? These questions are all things future buyers will consider as they contemplate buying your home, so it’s best to evaluate carefully before you take the leap.
As a flipper, there are other additional to look carefully at the neighborhood. You need to consider how easy or difficult it will be to sell your flip and how neighboring homes will impact your property’s value. While it can be tempting to snag a great deal in a less than desirable neighborhood, you should make sure the area poised for growth. Neglecting to do so can cost you big on resale, and you may end up spending more fixing it up than you can make back at closing.
Have you carefully inspected the basement and attic?
It’s easy for cleanup crews to fix damage from fire and water in the living spaces of a home, but it’s not always so easy to do so in areas that are sometimes an afterthought for buyers; attics and unfinished basements. That’s why it’s worth your time to take look for a few specific tell-tale signs of existing or prior damage from fire, pests or water before you put in an offer.
Here’s what you should watch for:
- If attic rafters exhibit a color that is not the color of natural wood, this may indicate a fire once occurred in the home and the attic integrity may have been compromised.
- You can find evidence of pest infestations. If you see lots of wood dust, there may be a termite problem, or if you see small droppings, you may be dealing with critters of the rodent variety.
- Check for any plumbing issues by eyeballing the pipes to see if there are any drips, rust spots or other obvious signs of degradation. You can also ask to see the sump-pump if the property you’re checking out has a basement.
If you find evidence of any damage, you can have it evaluated and addressed in your pre-purchase home inspection and can decide how to move forward from there.
With your resale value in mind as you look for your next property or investment, you can make a wise decision that will pay you back when it comes time to sell your home.