Before buying an investment home, you should consider its resale value. Having an understanding of the home’s resale potential can save you from the hassle of selling it in the future, as well as ensure that you profit off of it. Remember, your real estate investment should help you earn money — not lose it.
The good news is that certain indicators suggest that a home will have a high resale value. In this article, we’ll go over them one by one so you can make sure you buy the home that makes you money.
#1 The home is in an ideal location
Your single-family home’s resale value is dependent on a variety of factors, but its location is often the deciding factor as to whether or not it’s worth someone’s money. Hence, it’s important to purchase a home that’s in an area that’s sure to be booming by the time you sell it. It doesn’t have to be the “best” neighborhood now — as long as it’s growing, your property is bound to appreciate. Remember, no one wants to live in a bad neighborhood, so you better make sure to buy in a market that has the essentials, such as shopping centers, supermarkets, and the like.
However, if you’re after fast money, you shouldn’t rely on plans. Instead, you should focus on the infrastructure that’s already there. Construction can be delayed or scrapped entirely, so you shouldn’t leave the fate of your investment property on future developments.
#2 The home is near top-graded schools
One of the first things that families will ask when looking for a home is, “What’s the school district like?” Even if you have no children, you should still pay attention to the type of schools that surround the home. If you buy a home that’s in a neighborhood that doesn’t have good schools nearby, you’ll be limiting your pool of potential buyers.
Plus, buying a home in a good school district can increase your investment’s resale value. According to the National Bureau of Economic Research, for every dollar that goes to the school’s funding, property values increase by $20.
If you’re from South Florida, you should consider areas such as Highland Beach in Fort Lauderdale, Oviedo in Orlando, and Palm Valley of Jacksonville. Furthermore, hiring a property management firm can help you find homes in suburbs that have the best schools.
#3 The home is in a safe and quiet neighborhood
Another sign that a home has a high resale value is that it’s in a safe neighborhood. No one would be willing to buy a home in a neighborhood that has a high crime rate. Bars on the windows, abandoned houses, and police patrols are common signs that the community is unsafe. Other signs include:
- Excessive street art
- Fences around houses
- Security signs around houses
- Unattended children
- Gang activity
- Illegal activity
- Shot-out street lights
Ideally, the home should be far from the hustle and bustle, but it shouldn’t be too isolated from society, either. It should still have access to shopping centers, grocery stores, and more. Consult a South Florida property management company to identify the neighborhoods with a low crime rate.
#4 The home’s floor plan works for most people
As a rule of thumb, the home that you buy should be family-friendly. Again, even if you don’t have children, if you’re hoping to sell the home at a high resale price, buy with your potential buyer in mind. Find a home with a floor plan that appeals to families — this means that its features should include the following:
- Three to four bedrooms on the same floor
- Two to three bathrooms with at least one bathtub
- Open-concept kitchen and dining room
Even if you don’t end up selling the home to a family with young children, in general, people still prefer an open floor plan. For instance, an open floor plan is better-suited to buyers with disabilities.
If you find a home that’s priced perfectly, but the problem is that it doesn’t have enough bedrooms, a property management company can determine how much it would cost to add more rooms. If the cost is reasonable, you should consider buying the home, as you’ll be able to recover your investment, anyway.
#5 The home has good curb appeal
According to a study conducted by Michigan State University, homes with good curb appeal can see an increase of 5% to 100% in their resale value. Fortunately, if your home’s curb appeal currently isn’t that appealing, you can enhance it with a little landscaping. If you’re still shopping around for a home, you should be concerned about curb appeal potential — this means that it can be improved without having to spend a great deal of money.
On the other hand, if it would take thousands of dollars to make the home look decent, you should think twice about buying it. It would be better to buy a home that’s already good-looking.
What are the signs that a home has low resale value?
Now that we’ve gone over the good signs, it’s time to find out what the red flags are. Below, you will find indicators of when you shouldn’t buy a home.
- It’s been listed for a long, long time. If a property is desirable, it shouldn’t take that long to sell it. Single-family homes usually stay on the market for 17 to 21 days. Anything longer than that means that no one wants it.
- It’s more expensive than similar properties. Why would anyone want to buy the most expensive home on the block, when there are similar homes beside it that are a lot cheaper? Over-priced homes are generally not good investments.
- It’s in poor condition. Inspect the plumbing, electrical, heating, and cooling systems. Are they in excellent condition? If not, you’ll have to pay for repairs and replacements. This could cause you to offset your profits.
Need help finding a property?
Don’t know where to start looking for properties? Luxury Property Care has been advising investors on their real estate investments for more than a decade. We help them compare properties, study their profit potential, and more. By working with us, you’ll also be able to find an investment property without worrying about your competition. Simply call us at (561) 944 – 2992 or complete or contact form to avail of our investment services.