Why You Should Never Purchase a House in the Neighborhood
While house hunting, getting a fantastic house in a desirable location is always a big score. But is it that important? Before you make an offer on that perfect home that you come across, you should first examine surrounding homes. If they are in a state of disrepair, or anything less nice than what you are considering, you could end up purchasing the costliest house in the neighborhood. This might be a bad idea for the following reasons.
You’ll Need to Sell it Someday
While at the throes of purchasing a home, it’s always easy to overlook the fact that one day, you could end up selling it. When this time comes, you’ll realize that it’s tricky to flip the most expensive house on the block. Although someone could end up buying the home, owning such property isn’t a good way of increasing your equity. The quality mismatch with other houses in the neighborhood will make other buyers overlook it.
You’ll Be Forced to Leave Room for Improvements
The best property investments always have the most room for improvement. Ideally, you need to make improvements in your home as you live in it. This, in turn, builds your equity in hopes of a higher valuation when you eventually decide to sell. Therefore, it’s recommended to purchase the worst home in a desirable neighborhood.
In this case, you are likely to land the property at a bargain. Making improvements on such property will also be worthwhile. Take note of the fact that “improvements” don’t entail undertaking a complete makeover. Small changes such as repainting and fixing the home’s odds and ends can significantly improve its value. If the home is priced above everyone else’s on the block, such insignificant improvements won’t have any impact on its resale value
You Should Expect the Neighborhood to Improve
In case you are considering purchasing the best house in a not-so-good neighborhood, hoping that things will improve, you could be in for a surprise.
Ideally, this is how things pan out: You purchase a lovely house in an up-and-coming neighborhood. With time, homes on the block gradually improve until all the neighboring homes are on the same footing as yours. Due to the drastic improvements, your home’s value will increase.
This sounds like a good idea, but this strategy rarely works. Therefore, never risk purchasing an unsellable house on an ordinary block.
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