I cringe when I see people make property purchases because a house looks modern or has the latest decor trend.
While I’m many years into my real estate career, I still work with a lot of first time home buyers and home sellers.
The bulk of my business is from referrals because I’ve been blunt and to the point if someone is thinking about buying a home that is in a less than ideal position.
My Perspective is Different
I don’t look at real estate the same way most people do. I grew up in a household that was renovated bit by bit over the years until it was prim, modern and pristine.
What I did not realize at the time was the location of that house was a prime location.
When my childhood house was sold, it wasn’t because it was updated to the meet the design trends of the time, it was bought because of its location.
I know this to be true because the buyers quickly turned it into a daycare centre. The buyers knew the location was perfect for it.
So what is the point of my story?
Always Buy For The Future Resale Value.
I’m always thinking about resale. I’m not emotional and I’m not anything else but a numbers guy.
Buying a house simply because it looks beautiful and is tricked out with automated blinds, heated floors and reclaimed hardwood floors, yet is located in a part of the city where no one wants to live, is definitely a poor choice.
Buying a house that is run down on the outside, dated on the inside but has good structure and is in a neighbourhood where there are great parks, schools, stores, easy access to highways or public transportation is a much better choice and here’s why.
You Cannot Change a Home’s Location
The condition of a house can change, but the location never will. The location of your home determines many things which will affect and influence a home’s value. These items include the overall quality of life, school choices, commute times, and social opportunities. Even if you find your dream home, you should never sacrifice location. It is often better to adjust your price range in order to find a home in a better neighbourhood, than to compromise.
One of the most important decisions we will ever make in our lives is where to live. It is the location that will most impact your everyday life and your home’s future value.
A great neighbourhood (location) creates desirability, desirability creates demand, and demand raises real estate prices.
You will have to sell your home at some point in your life.
While I always suggest buying a house you can improve. I know you may not want to go through a renovation or it’s not always affordable for you to do so.
So how do you overcome that hurdle?
If You Buy The Right House It Will Retain Its Value
You know me, I’ve always had the mentality that you should buy something that you can create value with. If you don’t want to create value or can’t, then I urge my clients to at least purchase something that is timeless and will survive changing markets.
Maria and I recently visited a house in Rouge Valley. When I walked towards the house I immediately thought to myself “What a perfectly designed house”.
Originally built in 1971, it is a classic design that was ahead of its time back then; it was built with a two car garage. One car per family was still more the norm back then.
Now, because of great foresight from the builder, it blends in to today’s standards of multiple cars per family (outside of the downtown core).
Invest in Land, not Structure
As I’ve mentioned before, the most important thing you can do as a buyer is to put your money into location and land. As time goes on condominiums, even a penthouse, do not appreciate the same way a property will, because new buildings are always being built. Houses aren’t demolished nearly as frequently as apartment buildings, even high end ones.
If you are somebody who doesn’t care about your investment and just wants to live somewhere that makes you happy, then I say go for it.
However, if your long term goal is to make a smart, informed decision with your money then take my advice and place your bet on the location, not the structure.
Still Not Convinced?
Location. Location. Location
Let’s take Yonge St. and St. Clair Ave. – Rosedale. One of Toronto’s most coveted neighbourhoods to be sure.
Clients of mine purchased a home that had not been touched since at least the 1950s. It was home to only one other family since being built in 1923.
Why such low turn-over? Location.
My clients didn’t buy it because of the curb appeal (although it is a nice looking home), they bought it for the location and the land it’s on.
For the price paid and the cost of a complete renovation, I’ve estimated they will see an appreciation of roughly $700,000 and it’s essentially due to the fact that they purchased the right house in the right neighbourhood (their timing was impeccable, but that’s an entirely different topic).
My clients were looking ahead when they bought that house. They new what school they wanted their children to go to and they knew the location they wanted because of convenience.
They were thinking like a real estate investor.
Think Future Resale Value
As a real estate agent I’ve seen everything from both sides of the fence.
I try think ahead into the future to predict what the market will do based on past patterns, and I can educate both buyers and sellers.
That’s the great part about being a real estate agent, I have an in-depth knowledge of the market.
So what should you do?
Make wise investments, and place your money into location over the latest gadgets and gizmos and I strongly believe that you will be much happier in the long run.