Is your Home an ASSET?
Everyone needs a place to live, a roof over their head. It is a basic human need, and something we all need to provide for ourselves and our family. We can choose to own our home, live with family, or rent a home. Early on in life I learned that owning a home was the way to go. How? My parents have only owned a couple of homes in their lives, but they chose a couple of rock star homes for appreciation. The neighborhood we lived in housed some of the most wealthy people in the world, seriously. Our home didn’t sit on the land or have the ammenities of those homes, but we were neighbors will some names you might recognize. There were some years of struggle financially for my parents, but they didn’t sell our home to make things easier. Now the home they bought in 1974 is worth approximately 20 times what they paid for it. Yes, inflation has happened, but if they had rented this home, they would have nothing and the inflation/appreciation would have still happened.
What’s the Secret?
My parents have owned their home for 43 years. That is a LONG time, by anyone’s measurement. Does everyone that bought a home in 1974 now have a home that is worth 20 times what they paid for it? No. Not even close. So what did my parents do that others didn’t that made their home appreciate so well? They bought a house that wasn’t super modern, even in 1974, smaller than the other homes in the neighborhood, and in a neighborhood with some phenomenal homes. It sounds like a simple thing, doesn’t it? But it wasn’t, they really had to tighten their belts to afford this home. My sister was a baby, I was 3, and my brother was 6 years old at the time. My mom wasn’t working, and the mortgage on this house was the absolute top that they could afford on my father’s salary. He ended up professionally refereeing soccer games to make extra money…he did this my whole childhood. It isn’t the right choice for every family to live like we did the first 5-8 years in that home. Even though I know how well it turned out for my parents, I don’t know if I would make that choice for my family. Quality of life is important to me, and I would want my kid’s father more involved if possible. My dad worked all the time!
What choices can YOU make?
If you don’t want to work every minute you are awake to afford your mortgage, and you don’t want to live in a shack surrounded by mansions…is a strong appreciating home still possible? Absolutely. There are choices you can make that will ALWAYS sell well. Floor plan for instance is always a winner…but people will make a floor plan work for the right location. Below are my best tips for choosing a home that you will love while you live in it, and love even more when it is time to sell!
- Location, Location, Location: You may have heard that location is all that matters when buying real estate. I agree that it is important, but maybe not for all the obvious reasons. You home is always only worth what a buyer is willing to pay for it…so you need to think about your buyer…meaning YOU when buying this house, because theoretically you will be selling to your future you. Are you a young professional, buying a home to live in alone…so you want hip and happening ? Maybe you are a young family, and schools and parks will matter for your children. Maybe you’re an empty -nester, and you want walk-ability and sense of community rather than the yard and size you chose to raise your kids. Whatever the reasons you have to buy the home, will most likely be the reasons the future buyer will also have…so make sure they are solidly met and stable. Meaning even if your kids will attend private school, be sure to buy in the best public school district…because those homes will always be more desirable to families with children. Also, the home closest to the park, the school, backing to the open space….a north facing backyard instead of west….these locations also matter. Never buy the home backing a busy street, or with something ugly in view…like power lines.
- Good bones: Sometimes a home will be just hideous, but a good buy. This depends on the “bones” of the house. Meaning cosmetic changes could be all it needs. Or the under the roof space is good, but removing a wall and opening things up is possible …check with a contractor if you’re not sure! A home that is difficult to reconfigure into a floor plan that flows or is more modern won’t be worth it to fix….too costly.
- Has there been a lot of deferred maintenance? Sometimes you will come across a home that has just never been loved. No one has ever treated that home with the respect it deserves….meaning changed the air filters, fixed the leaking kitchen faucet, or replaced the broken door knobs. Depending on the quality of the home, and how long it has been unloved, you could be biting off way more than you want. After 15 years of selling real estate in Arizona I truly believed termites were no big deal. That was until I saw the little patio home in Mesa that had been a rental for over 20 years. Baseboards, shelving, even the drywall were destroyed in this home. There was evidence of termites everywhere. Trails through the drywall that would require ….I don’t know, removal of the drywall to repair? There were enormous holes in the unfinished garage’s walls….so I wonder what we couldn’t see.
There may be things you don’t notice about a home…maybe you’re in a hurry to find one, on a short leash to find your next home, or completely hypnotized by the kitchen. This is why you need a great real estate agent whose eyes and professional experience will help guide you. Please feel free to reach out to me at any time! (hint! hint!)