If you're like most people who are purchasing a home for the first time, you're undoubtedly looking forward to spending many happy years in your new home and neighborhood. However, many people in your position overlook one of the most important aspects of becoming a homeowner for the first time — the potential resale value of the property. After all, first-time homebuyers tend to plan to stick around for a number of years. As a result, they look for good schools in family-friendly neighborhoods, but these factors aren't necessarily indicative of a home's potential resale value. The following are three questions you should ask before finalizing a real estate sale if you want to optimize your chances for a good return on your investment.
Is the Area Slated for Urban Renewal?
Just because a neighborhood's future doesn't include being part of an urban renewal project doesn't mean home values will drop in that area. On the other hand, values are almost always guaranteed to rise in areas that have been slated for upcoming urban renewal projects. The downside is that many homes in these neighborhoods are rundown and in need of both cosmetic and structural rehabilitation, but if you can find one with a low enough price, paying for improvements out-of-pocket may be well worth it.
Is the Area Walkable?
The trend toward walkability won't be waning anytime soon — modern homeowners like to be able to access amenities such as coffee shops, restaurants, and local parks without having to get behind the wheel of their vehicle. As an added bonus, you and your family will simply enjoy a better quality of life in a walkable area rather than if you lived in its more remote counterpart.
Is the Real Estate Market in the Neighborhood Hot?
Although everyone naturally wants to live in a desirable neighborhood, first time home buyers should think twice about joining in on bidding wars or otherwise having their hearts set on living in a neighborhood where the real estate market is white-hot. These prices aren't sustainable, and chances are good that you'll end up underwater on your mortgage in several years after the market flattens out. Signs that a market is too hot to handle include average home sales time frames of less than a week and bidding wars. A better strategy for optimizing future resale value is to look at neighborhoods surrounding these hot spots instead.
If you have additional questions, reach out to a local real estate agent.Share