What makes a home purchase a good investment?

Updated: Oct 10, 2018

You want your home to be a great home as well as a great investment.

Before looking at homes make a list of "must haves" and "would likes". It should start with the purchase price range and expand to include things like a garage, ranch, school district etc. This will make it easier for you to focus in on your dream home. Keep in mind that most homes are not perfect even if it's a new home construction but it can be perfect for your situation. Below are some of the items to include in your list:

Investment Potential - If you are able to find a home on the market for awhile or in need of cosmetic upgrades you can usually get a great deal. Meaning purchasing at a lower price with potential for a major increase in value after cosmetic adjustment or minor renovations. I have advised many clients to put less down then intended so they have funds after closing for the desired improvements

School District - Even if you do not have kids in school, districts play a major part in home values. More desirable schools will usually yield higher price points for a similar home in a less desirable school area. Also, pay attention to the elementary, middle, and high schools in the area you are considering. My 1st home was in an area we expected to be in until middle school. This allowed us to choose the best home for 7 years before selling an moving to the another area for middle school. The point is to think about when you buy your home and also when you may want to sell it in the future.

Square Footage - Obviously square footage, bedroom and bathroom count are important items to consider. Further it is generally less expensive and easier to remodel square footage then to try and add square footage.

Equity Position - Are home values going up? Peaking? Stabilizing or dropping? Your realtor should be able to help you do a market analysis. You want your home to be a great home as well as a great investment.

Accessibility - Do you want to commute? How close is shopping? How long will it take you to get to regular activities? Sometimes it makes sense to drive a little further out to meet all of your needs in a home. Other times it makes sense to sacrifice a "would like" for easier access to work, restraurants, shopping, church, etc.