3 Tips for Buying a Home that will Appreciate in Value
For most people, a home is the most important financial investment they will make in their life. You may have carefully considered what you want from your new home
: how many bedrooms and bathrooms you’re looking for, what general area you would like to live in, what price range you can afford – but it is also wise to consider the purchase from the perspective of an investor.
Whether you are upsizing, downsizing, or starting out fresh in your first home, apply some tried and tested strategies to ensure that your investment is protected and positioned to generate returns when you are ready to sell again.
While the market can fluctuate and appreciation rates may be uncertain, there is a fair amount of stability and predictability if you focus on the right criteria.
How to find a home that will increase in value.
#1. LOCATION, LOCATION, LOCATION
The most important criteria for predictable appreciation of any property over time is location. This may seem like a cliché, but it is drilled into the real estate psyche for a reason. Do your research, and factor these things in when considering the location of your next purchase:
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#2. Leave some room for improvement
While it is appealing to move into a home that’s turn-key with no work to be done, you will get a higher return on your investment if there are some areas in the home that have room for improvement. Look for upgrades that you can make over time that will increase the value of your home. This includes kitchen upgrades, windows or landscaping, but avoid major structural problems with the foundation, supporting walls, and roof, or pervasive problems like mold. Choose a home that can have great curb appeal by the time you decide to sell, but avoid buying the best home in the neighbourhood as the relative value of the home can be pulled down by surrounding lower value homes.
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#3. Know what type of investment you want to make
Is this a shorter term investment (5 – 10 years), or are you looking to stay in this home for a long time? Talk to your real estate agent about what your investment priorities are, they should be able to direct you to the best options for mortgages and appreciation potential.
Whether you are looking specifically for an investment property or buying your forever dream home, it is important to carefully consider potential appreciation and depreciation factors so that you can protect your investment and have it work for you in the long term.
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