4 Ways to Make Money Off Your Next Home
But if you really want to make a smart investment, you’ve got to look beyond today’s desire and consider tomorrow’s buyers. Why? Because despite your best intentions to spend the next 30 years in your new home, life may have other plans. For instance, what if your spouse’s job moves out of state? You don’t want to be stuck with a home you love but don’t live in anymore.
Luckily, you can still follow your heart while keeping resale value in mind. Here’s how.
Choose a Desirable Location
Location is king in real estate. The structure itself doesn’t matter quite as much as the dirt it sits on: A 1,600 square-foot home worth $120,000 in Arkansas could be worth $1 million in the heart of San Francisco. Add a stunning view or water to the package, and the dollar signs multiply.
Schools have a major impact on home value, so do your homework. A study by Brookings Institution found that homes in high-scoring school districts were priced an average of $205,000 more than those in low-scoring districts. Even if you don’t have kids, you don’t want buyers to pass you over because you’re two streets away from the county’s best school zone.
Be sure to pay attention to the home’s surroundings as well. Is it located near an airport or on a busy main road? If so, these could negatively affect the price you fetch later.
Buy Low for the Neighborhood
Want to know a surefire way to lose money on your home? Buy the most expensive home on the block. It doesn’t matter how fancy the kitchen or lush the landscaping. Buyers looking for a $300,000 home don’t shop on a $200,000 street. That’s why Dave recommends buying a nice home at the bottom of the price range in a great neighborhood.
Think of your home’s value like an elevator in a high-rise building. There’s a lot more room to move up from the ground level than the top floor. So purchase your home with that mindset. If you’re shopping on a $200,000 street, look for a home priced at $150,000. With just a few upgrades, you could gain immediate equity.”
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