While you're in the process of house hunting, all you want to do is find a keeper, get the keys and settle into your new life. But it pays to think long-term when buying a home because you're probably going to be selling it sometime in the future, and you want to get a good return on your investment. So, keeping certain factors in mind when purchasing a home is key to ensure that it has good resale value. Here, six things you should think about, according to professionals.
People always emphasize "location, location, location"—and for good reason. You can change many things about a house, but not where it's located, so think wisely about where you're buying. "If you choose a home in a desirable location, odds are that location will always attract a larger pool of home buyers," says Thaddeus Wong, co-founder and co-owner of @properties in Chicago.
He also recommends taking into account the walkability of the area. Is the home close to schools, grocery stores, restaurants and parks? "These neighborhood amenities can all have a lasting impact on your home's value," he says.
Dottie Herman, CEO of Douglas Elliman, adds that it's important to look at the quality of school districts. "The better the school district, the higher the value of the home," she says. "School districts play an important factor in resale value."
She also suggests taking a ride around the area to get a feel for it. "Make sure that the area does not have a large number of vacancies, businesses that are closing, or a large number of foreclosure signs, she says. "Ensure that values are increasing in this specific area."
Lot and landscaping
A home's value is often concentrated inside its walls, but curb appeal is a major factor when reselling. "If you're purchasing a single-family home, pay attention to the size and shape of the front and back yards," says Wong. If the home is overly landscaped, you might be paying more for something you won't maintain. And even if you do opt for paying landscaping fees, that's not money you're guaranteed to get back when you sell. Stick to a house that's sparsely or moderately landscaped, so you can easily make improvements to boost curb appeal.
Similarity to neighboring houses
While you want your home to stand out from the crowd, you also want to make sure it's comparable to others in the neighborhood. "If yours is the only single-family home in an area populated by townhomes, it will be more challenging to assess resale possibilities and estimate what your home is worth," Wong says.
It's also wise to avoid buying the most expensive house in the neighborhood because less expensive homes will bring down the value, Herman says. "Conversely, if you buy a lower-price home in a more expensive area, houses that are more expensive will bring up the value of the home." This phenomenon is known as functional obsolescence.
Although renovations can be made to change the layout of a home, they are time-consuming and costly. So try to find a space that's appealing and flexible. "Most home buyers prefer natural light and open spaces, so pay attention to the layout of the home," Wong says. "An open-concept design can look much more spacious than a home with a choppy floor plan." Although some believe the number of bedrooms can influence a home's value, he adds that having a few large bedrooms may be more appealing to future buyers.
History of the home
When you're considering a house, it's important to look beyond aesthetics. A home is one of the biggest investments you'll ever make, so you want to make sure you're fully informed of its history and that it's physically sound, from roof to foundation.
"Ask the tough questions," Wong says. "You'll want to know if the home floods easily, has suffered from mold or was damaged in a fire." While you might be okay with your house's complicated history, it could cause future buyers to turn away.
Whether you're buying a condo or a single-family home, you may have to pay fees on a regular basis, such as homeowner association or condo fees. Keep in mind that such fees can deter future buyers if they're too costly, says David Rosen, a real estate agent with Douglas Elliman in New York City.
Wong says it's also important to determine whether the community or building you're considering is in good financial standing with plenty of money earmarked for unexpected costs. If not, you're more likely to pay special assessments (extra fees required to pay for unexpected community projects, like landscaping or a new pool), which could also turn off potential future buyers.