What is changing in your area, or what could happen that would cause substantial changes that could impact your value and/or intended use of your property? Is there new industry coming that will have good paying jobs, or are companies closing down causing the loss of jobs? Are new developments planned that will compete with your neighborhood? What does your neighborhood look like – are people keeping their properties up? Are they updating, remodeling, transitioning the neighborhood, or is it on a decline? Is it occupied by owners, tenants, or a good mix? All are good people, but tenants usually don’t usually do much physical improving to the properties they are renting.
What are the building restrictions in your area? Is your local government trying to control the market by limiting or inhibiting growth? It truly serves nobody when government tries to do what the market will naturally do by itself, but there are those people that think they know better and are going to save us from ourselves … now that they’ve moved here. Is that going on in your area? If so, you might find artificially enhanced values due to the anxiety of demand in such conditions.
When you have artificial values like that you have to wonder if you are resting on top of a bubble value-wise. If so, when will it burst and how hard will you fall? If not, good for you, but how does one know? Consider how many new lot/home projects are on the books now, or are able to be built in the future.
Private property rights still exist in this country so without compensation by governments that are taking away rights there will still be reasonable development by people that wish to do something to achieve the highest and best use of their land.
Your home will need maintenance. You should project what and when it will be required to make sure it fits in your budget. You might be able to put off getting new floorcovering if yours is aesthetically diminishing but functioning just fine, but when your roof is ready to be replaced you can only put it off so long by putting tarps over it. You will need to replace it and that is a substantial cost item. Be sure to plan for it when you buy or during the course of your ownership. You can count on the hot water heater and well pump going out at some point, you just don’t know when. You can estimate, however, when you buy based on when they were last installed or replaced and considering their anticipated life expectancies.
Live in a HOA neighborhood? How is your Association Board? Are new people with new ideas and values moving in and getting on the Board? How much of a change will have in the long run on your enjoyment of your property? Try to get answers to these type of questions when you buy, not learn about it after you are in and settled. HOA’s get reputations and you don’t want to be trying to sell if yours has a tarnished one.
Real estate is a long-term game. You buy now for your future financial benefit with the intention of enjoying the property along the way. After you’ve determined that you like the characteristics of the property and the neighborhood it is located in be sure to check out the many variables that could influence your enjoyment of the property, or your financial experience with it in the future. We know that “the only constant in life is change” (Heraclitus) so make an effort to anticipate the changes to determine their potential impact on you. You will be grateful for the effort given in this endeavor.
Look beyond the boards and nails and examine the intangibles. It is important.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. firstname.lastname@example.org