Buying a home, most people focus on the present and the near future. They consider current needs and how their home will serve them in the coming years. However, it is also essential to think about the long-term investment potential of the property. It means evaluating the home’s resale value. Let’s go through the main factors impacting the property value to consider before you make the purchase.
What is a home resale value?
The resale value of a home refers to the amount of money you can expect to get back if you sell your home in the future. Well, you may not think about selling your home right now, though it is always wise to consider the long-term potential of your investment. You never know what may happen next, and it is always better to get prepared.
Plan to buy a home for resale?
If you are considering buying a home to resell it for a profit, the right financing can make all the difference. That’s why it’s important to partner with a reputable and trustworthy mortgage company.
LBC Mortgage offers a wide range of financing options that can help you achieve your goals, whether you’re looking to purchase a fixer-upper and renovate it to increase its value, or simply looking to invest in a property that you can quickly turn around and sell for a profit.
With LBC Mortgage, you can also benefit from competitive interest rates, flexible payment plans, and excellent customer service. Their team is committed to providing support and guidance to navigate the complex world of real estate investing.
5 factors impacting the home resale value
What affects resale value of a home? There are several factors that can help you determine whether a particular property is a good long-term investment.
The property location can have a significant impact on its value. A home in a desirable place will be worth more than a similar home in a less popular location.
Desirable locations can vary depending on the area. In some areas, a home near the beach or with an ocean view may be more desirable. In other areas, a home in a good school district or near public transportation may be a great choice.
When evaluating a home’s location, consider the neighborhood as well.
Is it safe and well-maintained?
Are there nearby amenities such as parks, restaurants, and shopping? These factors can also impact a home’s value.
2. Size and Layout
The size and layout of a home are also important factors to consider when evaluating its resale value. Larger homes with more bedrooms and bathrooms will be worth more than smaller homes. However, the home layout is also important.
Homes with open floor plans are typically more desirable than those with closed-off rooms. Additionally, homes with a good flow between rooms are often more valuable than those with awkward layouts.
When evaluating a home’s size and layout, consider how it will appeal to future buyers. Will it be perfect for families, or is it better for singles or couples?
A well-maintained home will be worth more than a home that has been neglected or poorly maintained.
When evaluating a home’s condition, look for signs of wear and tear.
- Are there cracks in the walls or ceilings?
- Are there leaks or water damage?
- Are the appliances and fixtures outdated or in need of repair?
While some issues may be easy to fix, others may be more costly. So, you’ll also have to consider the cost of repairs or upgrades when evaluating a home’s resale value.
Newer homes will have a higher value than older ones. However, there are exceptions to this rule.
Homes that have been well-maintained and updated over the years may still be worth a lot, even if they are older. On the other hand, a newer home with damages and poor maintenance may have the same value as a similar older but well-cared property.
When evaluating the age of a home, consider its history.
- Has it been updated or renovated over the years?
- If so, what improvements were made?
It can give you a better idea of the home’s long-term potential.
5. Market Conditions
Real estate markets can fluctuate over time, and it is important to be aware of these changes. If the real estate market is strong, you may be able to sell your home for a higher price. However, keep in mind that market conditions can change quickly.
Also, you should consider the local market. While the national real estate market may be strong, the local market may be weak. So, always try to research the local real estate market to analyze and get a better deal.
Townhouse vs. single-family home resale value
If you haven’t decided what to buy – a townhouse or a single-family, let’s go through some pros and cons of these property types based on their resale value.
Resale Value of Townhouses
- Less expensive to purchase than single-family homes, making them more accessible to first-time homebuyers and those on a budget.
- Often located in desirable urban or suburban locations, with easy access to amenities like public transportation, shopping, and restaurants.
- Low maintenance costs, such as exterior upkeep and landscaping are often taken care of by a homeowners’ association (HOA).
- Can be attractive to older buyers or those looking to downsize, as they offer a more manageable living space.
- Limited outdoor space may not be attractive to buyers who want a yard or garden.
- HOA fees can be high and may increase over time, reducing the affordability of the property.
- Limited control over exterior design and renovations, as they must often be approved by the HOA.
Resale Value of Single-Family Homes
- Often located in quieter, more private neighborhoods with larger yards and more green space.
- Greater control over the design and renovation of the property, as there is no HOA to enforce rules.
- Can be more attractive to families with children, as they offer more indoor and outdoor space for playing and entertaining.
- May appreciate more quickly and retain value better than townhouses, particularly in desirable neighborhoods.
- More expensive to purchase than townhouses, which may limit the pool of potential buyers.
- Higher maintenance costs, as the owner is responsible for all upkeep, repairs, and landscaping.
- May not be as attractive to older buyers or those looking to downsize, as they offer more space and require more upkeep.
Investing in real estate is a long-term game. By considering the long-term potential of a home, you can make a wise investment that will pay off in the future. One of the options is to work with a knowledgeable real estate agent who can help you evaluate a home’s resale value. An expert can provide you with information about the local market and help you make an informed decision about your investment. And if you need financing to purchase a property, LBC Mortgage can help – contact us for a free consultation!