Purchasing a new home is one of the biggest financial decisions you’ll ever make.
Even if you’ve bought and sold homes in the past, every new real estate venture needs to be treated with the same care and consideration that you would give to any other investment decision.
While there are financial considerations, it’s also important, too, to pay attention to the piece of property that you are considering. Ask yourself these five questions before considering any real estate purchase.
1. Is the neighborhood improving?
This is one of the most important questions that needs to be asked. Investing in a home in a neighborhood where the other properties are not being maintained is a recipe for disaster. No matter how much work and effort you put into your property, you’ll never see the increase in the value of your property you'd like. Furthermore, you’ll have to contend with all of the problems of a declining neighborhood.
2. What maintenance will I need to do on a regular basis?
Seriously consider the amount of maintenance that comes with every feature of the home, and what it will cost you over time. For example, carpet might be a cheaper flooring option, but it has to be professionally cleaned and replaced more often than hardwood. High-end appliances may cost more upfront, but they will last longer and give you a lot more options than standard appliances.
3. What do I need to fix as soon as I move in?
If you’re comparing new construction to pre-owned houses, make sure you take into account the cost and time spent on projects that have to be completed before moving into the home. Updating a kitchen or bathroom can cost thousands of dollars, and the investment might not come back to you when it’s time to sell the house. Often, repair work is simply expected by new owners, it doesn’t add value.
4. How long will I be able to live here?
Buy a home for the family you’ll have in five or ten years. One of the main reasons that people cite for wanting to move is that they have outgrown their house. Buying a place with enough room for you and a growing family might mean you have extra space now, but it will save you a lot of hassle and money years down the road.
5. Will this home maintain its value?
After considering all of the other questions in this list, answering this one will be easier. Remember that purchasing real estate is more than just buying a place to live -- you’re also choosing how your money will be invested over the next several decades. Make sure that you select a property that will increase in value over that time frame.
These five questions are basic for anyone who is considering a new home purchase. Once you have looked at a potential property with these in mind, you will have a much better idea about whether this particular property is a good choice for you and your family.