Friday, March 24, 2017

Buying for profit; 10 ways to make sure your home keeps going up in value

There’s an old adage that you don’t make money when you sell your home, but when you first buy it. While that may seem nonsensical considering the big, fat closing check you get once it sells, but in reality, the ceiling (and floor) on your profit is first decided when you buy the home. Far from guesswork, there are a host of proven characteristics that will then determine if your freshly bought house appreciates in value over the years, and to what degree.

So when buying, it’s important to consider these factors to ensure that you make your money by buying correctly, delivering the most profit on your house long-term.

Proximity to parks, schools, and other daily conveniences.
Neighborhoods with parks, jogging trails, sports fields and other recreation areas are always attractive to future homebuyers. Likewise, look around for neighborhood grocery stores, gyms, doctor’s offices and hospitals, hair salons, banks, and gas stations in the vicinity when you’re considering buying a home. Drive around in a one-mile radius from your potential new home and check out the restaurants, pubs, cafes, coffee shops, boutiques, art galleries, and other establishments that add character to the community.

But there is no factor more important for predicting future home values that the quality of schools in the area. In fact, high-rated public schools help stabilize future values since young families, so concerned parents will always want to move there and that high-demand will help bolster home values.

Location, location…and you know the rest!
It’s been repeated so often it’s a cliché, but it also happens to be just as true as ever; location is maybe THE most important factor when buying a home. In fact, where your home is can help increase its future value a lot more than what it is. So look for a quality neighborhood above all else since homes in pleasant, safe, quiet, family- neighborhoods always do well when it comes time to sell. Just walk around and you’ll be able to spot signs of pride of ownership, like well-maintained lawns, freshly painted homes, decorated front porches, and other custom homeowner improvements. If you’re able to buy a house in a mature, high-end, or luxury community, you’re almost certain to make money as the values steadily rise over the years. On the other hand, being too close to a prison, halfway house, railroad tracks, or a waste facility may bring down your values no matter how nice your home is.

The higher the ceilings, the higher the home values?
Ceilings that are taller than average always make a home look and feel airy, open, and bigger, no matter how big or small the home really is. However, making your ceilings higher isn’t something you can practically undertake once you already own the home since hiring contractors to raise your ceilings can be incredibly expensive – or impossible. Instead, look for a home with high ceilings when you’re buying, at least 6 inches or even one foot taller than standard building code in the area. You’d also be wise to avoid homes with low ceilings, giving rooms a cramped or smaller look and limiting your potential future home value.

Outdoor living spaces pay big returns
Over the last few years, outdoor living and entertainment areas have been hot commodities, and that trend is expected to continue as people look for usable spaces that allow them to have shared experiences, not just vast and empty lawns. So if you can find a house with nice sitting areas, old-fashioned wrap-around porches, gazebos, outdoor kitchens, or any number of areas to entertain and spend time with family and friends, you’re future values are in good hands.

The caveat to that is that if you’re considering buying a home with a swimming pool, built-in hot tub, or sports courts (like tennis or basketball courts), data shows that they won’t increase the value of the home. In fact, they actually may turn off a certain portion of buyers who don’t want to deal with the maintenance, liability, or expense – or just plain won’t use them.

Natural light brightens up your future home value
When you’re out looking at homes, pay attention to the amount of natural light each one receives in the main living spaces. Natural light always makes your home look bigger, more airy and open, and is flatting to any artwork or décor inside. Of course, you can just switch on light bulbs if a room is dark, but that's never the same. With good natural light, your home's worth will be easy to see when it's time for future buyers to walk through and form a first impression.

Plenty of square footage (but not the largest home in the neighborhood)
Spacious and roomy homes with plenty of square footage are always in demand, but just how much square footage is considered big depends on the neighborhood. But no matter what, it’s never a good idea to buy one of the smallest homes on the block, as the values won't rise like it should. You can easily remodel and upgrade the condition of a house, but adding square footage is so costly and time-consuming that it's usually not worth it.

Flowing, open floor plans
Having a cavernous mansion is one thing, but it’s perhaps more important that it’s planned and laid out correctly. Call it Feng Shui or just good design sense, but single story homes with open, flowing floor plans and great room concepts always do well when it comes to resale value. You also should try to buy a home with at least 3 bedrooms and at least 2 full baths, because any smaller than that and it won’t be attractive to families and young couples that are buying and looking to grow into it. The exception to this is buying in older neighborhoods where most of the homes only have two bedrooms and one bath, for example.

An abundance of comparable homes in the area
It may seem like a good idea to buy a home that really stands out from others in your area (especially since the price tag is probably lower than others in the neighborhood), but in reality, its uniqueness will probably only hamper your future value. Maybe it’s too small, too big, has a classic Roman fountain in the front yard, or has a homemade addition, but whatever the trait that makes it different, it will have little or no comparable properties to boost its value over the years. You never want the biggest or the smallest home in the neighborhood, and this is also true for funky or unique construction, so instead look for a home that has plenty of comparables when an appraiser does their valuation.

Hardwood floors add value and never go out of style
Some things never go out of fashion, and hardwood floors are one of them. While carpet wears out and gets dingy, tile in the whole house looks cold and antiseptic, and linoleum is just, well…linoleum. But as hardwood floors age, they only get more richness and character. Even when hardwoods do start to dull and get scratched up, they’re super easy to refinish and recolor before you move in – or sell – your home.

Focus on the kitchens and bathrooms

No matter which design trends come and go, homeowners will always want big, functional and nice kitchens. These days, kitchens are perhaps the most popular room in the house, a center point for all family happenings. Therefore, well-designed and open kitchens are always a positive when it comes to resale value. The same can be said for bathrooms, with the one exception that bathrooms are must subject to the whims of current popularity that dictate what's in and what's not. But sinks, fixtures, lighting, flooring, and even tile are relatively easy to upgrade in a home, but the space and layout of a bathroom (and having enough of them!) are always fundamental for ensuring your value down the road.

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