When purchasing a home–especially if it is a first home–many buyers get so caught up in the “here and now” that they totally overlook how the house may–or may not–fit into future plans and outlooks. Obviously, buying a home that fits into your current needs and wants is the main priority, but this should not eliminate ortotally overshadow an awareness that future needs and wants must also be considered. These future concerns should be addressed whether you plan to stay in the home for a considerable length of time or if you have plans of selling within a specific time frame.
There are two costs that need to be considered in the purchase of real estate. First, of course, is the initial price of the home. Second, and just as important, is the eventual resale value. Therefore, to ignore the factors that affect resale (or your continued enjoyment of the home if you don’t sell) is to be unaware of the true TOTAL cost of the home.
With an eye to the future, there are a few important factors that play into the cost equation that should be considered when comparing and choosing homes, including:
Not adequately considering the size of the home can be one of the most expensive mistakes in your purchasing process. If you buy a house that is too big or small for the neighborhood, you will either be paying for size that you cannot recoup (too big) or face a more difficult sale at resale time (too small). Like many things in life, the middle ground is often the best and in this case, it is the house that is the best fit for its area that will bring the best return.
As you have probably heard numerous times, location is usually the most important factor in the value of a home. When buying for the future, though, it is necessary to consider how location will affect resale value. For example, if development is moving in one direction in an area, it may be wise to buy with that in mind rather than buying in the area that is currently in demand. Be aware, though, that there usually is a limit to how far people will commute. To purchase outside of that “limit” can make a home much more difficult to sell in the future. In fact, in a number of areas in North America, there has been a movement BACK toward city centers as more and more commuters got fed up with long drives and traffic jams.
Over a period of years, home styles can evolve and change. As an example, in many areas split level and split foyer (or split entry) homes were very popular for a number of years. Today, though, in these same areas virtually no contractors are building that style of home, which lowers the resale value of homes of that type. Sticking with more classical styles, depending on the area of the country where the home is located, is generally the best tactic when keeping resale in mind.
Have you ever walked into a home that has not been updated since the 1970s? Bright green shag carpet, gold (or avocado) appliances, vibrant (or even garish) linoleum. Virtually any buyer of such a house will need to factor in the costs of remodeling and updating– if they will consider the home at all. And that will equate to a lower sale price, costing the seller money.
This should be a good lesson about avoiding “trendy” homes when purchasing today. It makes much more sense to stick as close as possible to the tried-and-true–white appliances, simple, quality cabinetry and trim, pile carpet in non-descript colors (beige, grey and the like) will bring a better return than a home that is loaded with the latest styles but will look very dated (like the shag carpeting and the avocado stove) when it is time to sell.
Since buying a home is both a financial AND an emotional experience, it is important not to put too much emphasis on one aspect or the other. To focus solely on the financial side runs the risk of missing the most enjoyable parts of home ownership– the emotional ones. To concentrate just on the emotional or the “feel good” aspects, though, can cost a considerable amount of money in the long run. Remember, there are two costs associated with home ownership: The original price and the net cost when the resale value is eventually factored in.