Two Important Considerations for First Time Home Buyer
First time home buyers are wise to buy with the end in mind. Thinking ahead in these two significant areas can pay big dividends in the future. Consider properties that will have a strong resale value and correctly evaluate the total cost of repairs and remodels.
First: Buy with re-selling in mind.
Home owners should plan to stay in the first home for a while to build equity and to maximize investment advantages. The fact is that few people remain in their first home forever. First homes are often used as spring boards to future, more valuable real estate purchases. That is why it is especially important to consider resale value when selecting the first home.
Analyze both the local area like Sacramento or the foothills of northern California and the house. Is the area stable or being revitalized? Is the area becoming a less desirable place to live? The trend of an area is crucial to understanding where property values are heading. The investment mantra “the trend is your friend” applies to real estate as well.
The house style and floor plan can have a big role to play if the property will gain in value or not. Pick a floor plan and house style that will look forward. If it is dated at the time of purchase, it will only grow more dated. The hope that retro styles will create value is a long shot.
Considering the future value of a property when buying the first home will help create value when looking for the next home.
Second: Know your abilities and limits
Many first-time buyers choose homes that need remodeling and put in “sweat equity”. Sweat equity is work the new home owner performs themselves. While this can be a great idea from an investment standpoint, it can create financial and personal stress.
Home repair and remodel projects rarely come in on budget or on time. They can create a great deal of stress for new first time home owners. The idea that the house is worth more than when they brought it may be little comfort after all the hard work and frustration of DIY (Do It Yourself) projects.
Truthfully assess current abilities, time constraints, money, and commitment level when it comes to renovation work. If professionals will be needed, make sure to accurately project how much their services will cost?
Ask the hard questions, will the needed improvements be good investments? Or will it run the risk of over-improving the property when compared to surrounding homes?
Doing quality due diligence before buying the first home can create real value for the home owner. Knowledgeable real estate agents like Dan Parisi can be a great benefit to first time home buyers. He can help with understanding local areas like Sacramento and the gold country foothills in California. First time home owners can create more worth in their home when they are ready to upgrade.