There are so many of us who just want to go big when it comes to going home, but it’s always worthwhile taking a step back and analyzing how the right type of property will fit your needs. It’s worth considering this quick self-assessment because you can find something that’s not just perfect for you now, but in the future, and you may save a few pennies while you’re at it:
Financial Considerations
In terms of your budget, you need to determine the maximum amount you can afford for the initial purchase. While there are many apartments for sale around, you’ve got to consider your potential mortgage options, savings, and any other sources of funding. Additionally, you need to factor in any potential management fees, insurance, maintenance, and property taxes. Sometimes we just look at the cost of the house, and that’s it- you’ve got to crunch those numbers!
Additionally, look at your investment goals. For example, if you are going for long-term wealth building, properties in areas with strong growth prospects can be far more suitable. It’s also important to assess your risk because development projects in rapidly changing areas may offer high rewards but are also high risk. Conversely, single-family homes in established neighborhoods are far lower risk.
Personal Preferences
It’s also important to look at how much home management you can fit into your life. If you are looking for a more passive approach, you may benefit from looking into condos with strong HOAs or consider hiring a property management company. Fixer-uppers often require more time in terms of management and maintenance, but turnkey properties require far less time investment.
It’s also worth asking yourself questions about your short- and long-term plans. If you plan to sell within a few years, it’s far more important to focus on properties with high potential for quick appreciation or those that can be easily improved and sold on, commonly known as house flipping. But if you’re looking for long-term investments, you should prioritize location and the quality of the property, as this will ensure better value growth and sustained demand.
Location
If you are looking for big city areas or small towns, the process is always the same. You should look for neighborhood trends and research local development plans, demographic shifts, but also look for areas with improving amenities, increasing employment opportunities, and/or gentrification.
A Few Other Factors
The fact is that while the real estate market is always booming, you’ve got to consider the condition of the property, as those needing renovation will require more initial investment. You should also consider potential layout changes or cosmetic updates that are in keeping with the area. It’s also worth considering the potential resale market and assessing whether the property will appeal to owner-occupiers or investors.
That exit strategy is critical, and by thoroughly evaluating all of these points, you will be far better equipped to make an informed decision about the right type of property that suits your personal preferences, overarching goals, and of course, your financial situation.
