The saying goes, ‘you make money when you buy in real estate, not when you sell.’ Isn’t that an interesting concept? We say this for a few reasons; the first: when you buy and hold real estate, you have the investment and the value of its worth in your hands – a current value you know to be true to the market at that time. The second, typically (although always negotiable) the seller of the property incurs or absorbs a lot more fees, prepaid items, commissions, and sometimes even the buyer’s closing costs out of the proceeds from the sale. And third, real estate is an asset that will always be a necessary segment in markets everywhere in the world because, well, everyone needs somewhere to live so having real estate ownership is an advantage.
So, when you’re buying, it is crucial that you understand exactly what you are buying and how that might impact any future ability to sell. Create value initially when buying the property by ensuring some universally desired characteristics are in the property, rather than elements that are specific only to your liking. We all know from watching HGTV that backsplash, flooring and paint are somewhat easy for the next buyer to change and fix themselves based on their own personal taste. Instead of buying for just those cosmetic reasons, think about a few other things that might impact your future buyer down the road:
A home that is more energy efficient will appeal to a more universal audience. Buyers like the idea of future cost savings when about to make such a big purchase. In markets like mine, temperatures in the Arizona summer can allow for utility bills to triple which means buyers look for dual pane windows, ceiling fans, updated or well-maintained AC units, they might check insulation, and even take north/south facing homes into better consideration when home searching.
While every buyer might be looking for something a little different than the next, in general the newer homes all have a split floorplan because it appeals to more buyers. A split floorplan is one where the main or master bedroom living is on a separate side of the house than the guest bedrooms. This allows for privacy and a feeling of having your own separate “wing” of the house. If your future buyer has young kids, this could sometimes be a deterrent in a few cases; however, most young parents still prefer the split floorplan as kids grow older and seasons change.
Location, Lots and Views
We all know location, location, location! I won’t beat a dead horse on that one, other than to remind you that sometimes location can also refer to what your lot has to offer even if you can’t be in the best location in town. Corner lots, lots backing to a park or reserve, quiet streets, or land with any kind of sought-after view will always keep value.
As I mentioned earlier, in today’s market people are more comfortable with switching out tile and adding paint to make a house their own. If you do plan for any renovations to add value to your home; make sure the upgrades you are paying for pay you out in the end! Open concept is extremely high on buyer’s wish lists, as well as big master bathrooms and walk-in closets. Sometimes adding square footage, if not in the right places, might not add the value that you think! Every market, neighborhood and home price point will fluctuate on this, so be sure to work with or ask a knowledgeable professional within your market before doing any major renovations.
Buying real estate so you can make money might seem a little unorthodox at first, but once you appreciate the value that appeals more universally, you’ll be off to a great start! Market conditions can always fluctuate and require risk, but home buying and selling can have such an incredible reward if approached the right way.