Tips for Buying a Property that Will Appreciate
Every property buyer knows that their real estate asset, more than a home for them and their family, can also be an investment, and everyone wishes to, when the moment of selling comes, list their property as a higher price and profit from it.
As many real estate professional states: you do not win in real estate by selling, you win by buying. So if you are ready to purchase a new home, or a commercial property, you need to consider from the beginning those real estate properties that will appreciate in value over time.
There are many factors that have to be considered for a real estate appreciation, some of them are really difficult to determine due to the uncertainty of the future, the economy or the market, at the end, you must know that every investment has a risk either low or high.
However, there are other factors that can be at your sight and control. If you know what to look for clearly when buying a property, you can benefit highly of this asset in the future.
Here are some tips that you can put into practice to help you identify those real estate properties that have more chances to appreciate in value over time:
Good timing
One of the main questions a property buyer commonly asks a real estate professional is “When is the right time to buy?”. While the question is very usual in the sector, the answer is not that simple.
While as real estate professional, we do not recommend only to rely in waiting for the perfect time to buy (location or planned renovations can bring much more value to a property), still there are some periods in real estate markets where prices can go lower than the normally listed.
So, you can research and ask some people in the field how is the market situation in your region and see if there is a potential in the short term to see prices going down. Another point that benefits buyers during these times is that real estate agents have less workload and are more likely to invest time in searching the right property for the buyer.
Find the right area
A great way to start looking for a property is by first identifying those locations with potential for growing and future developments, with ease of access and closeness to the most demanded amenities. At the end, location is one of the key factors that can significantly appreciate a real estate property.
Some points to look at are for the right area for your property is the quality of the neighborhood, closeness to the city and shopping centers, schools, malls, etc. Additionally, its good to see if that particular area has a strong economy and a solid job market, these factors determine the living demand of the area and hence, the pricing of the land.
Beware of the mortgage deals
While many financing plans look very attractive on the surface, they can impact you negatively if you are considering your property an investment for the future. A down-payment of 10% for a US$ 200.000 home with a mortgage of 30 years and an interest rate of 5%, can cost you (in 30 years) close to US$ 350.000.
On the other hand, if you reduce the loan length for 20 years, but put a down-payment of 30%, you will pay almost the same monthly mortgage fee, but your home will cost you, in 20 years, a total of US$ 221.745. That is a huge difference.
So besides looking for factors of appreciation of your real estate property, take a look on your financing plan of the asset and, if so, when you plan to sell it, for example, if is 5 or if is 10 years from now, this will help you to visualize what can be the real cost of your property by then, considering you are taking a mortgage or any other financing deal.
Prepare for making repairs and remodeling
A property well maintained and in good conditions over the years will help you to keep it valuable for future buyers and at the same time, periodical maintenance keeps the repairing times and costs low.
At the same time, if you have the plan of sell your home in the future, there is not a better way to increase the chances of appreciation than remodeling once in a while certain parts, for example, kitchen and bathrooms are usually deal breakers for many buyers if they are very old, updating these rooms can increase your chances to sell your home to new buyers.