Home vs. Investment – Let's Have Both

Posted by Greg Eckler on Tuesday, February 1st, 2011 at 3:47pm.

house_on_seesaw_200I will often ask buyers what ratio of their purchase is the “perfect home” and what ratio is the “perfect investment”. If I had to generalize, I'd say most buyers are looking for a home, and the investment is a secondary concern. The ratio may be be 80/20 or 70/30 in favor of the perfect home.

I tend to place more emphasis on the investment side of the equation, or more importantly, how the house appeals to the largest audience so it sells quickly later when these buyers are ready to sell. In most cases, you can find a nice home with great resale potential on the market. Pointing this out to buyers can help them have the best of both worlds.

Buyers can raise the investment potential of their purchase simply by considering a few factors when buying a detached single family home.

  • Avoid busy streets – families with kids may shun these homes due to excess traffic and noise.
  • Power Lines – Don't buy a home near power lines. I don't have the research to back this up, but power lines are unattractive and some buyers feel it's a health hazard.
  • TV Location – Is there a place for the TV in the main living area? Even if you don't watch much television, others do. Keeping this in mind will help.
  • Bedroom/Bathroom – How many showers does the house have? If there is one shower and three bedrooms, how will that work when everyone is getting ready for school or work?
  • Neighborhood and Block – Most neighborhoods in Denver have a block or two that just don't fit. Make sure the area around your new home meets the standards of the neighborhood.
  • Floor Plan – How will people occupy the home? Is there an Office/Den? Will the floor plan be suitable for buyers with kids, or buyers without kids?
  • Shopping – Can you walk to nearby shops from the house? A pedestrian-friendly neighborhood is in high demand these days. Often these homes will cost more, but it should pay off in the future.

“Better investment” is hard to define without predicting the future but maybe that means having the ability to sell quickly in a bad market, or realize higher appreciation levels in a good market. Keeping the above points in mind should help, regardless of the market.

As a Realtor, I think this information is important. Down the road, when buyers are ready to make a change, these considerations could greatly assist in the sale of their property. Good advice now, translates to a smooth transaction later, and great referrals from these and other clients.

2 Responses to "Home vs. Investment – Let's Have Both "

The Spring Selling Season Is Approaching - Are You Ready To Sell? wrote: [...][...]

Posted on Tuesday, February 15th, 2011 at 8:00am.

Roseanna wrote: This site is like a classroom, excpet I don't hate it. lol

Posted on Monday, August 8th, 2011 at 8:06pm.

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