When you are shopping for a home, you should always be evaluating its future resale potential. That may be obvious when you are shopping for a starter home. But you should consider it even when you are buying what you intend to be your forever home. You never know how circumstances can change in the future, and it’s best to have an exit ramp from any investment.
Here are some things to look at when you are evaluating whether the home you’re thinking of buying will be easy or hard to resell later.
- Condition. One of the most critical factors is the condition of the home. Pay special attention to the foundation, the roof, the electrical wiring, the plumbing, and the HVAC, as these can be expensive to repair. First time homebuyers may sometimes think, “It’s okay if it has serious problems. It’s just my starter home, and I can live with those issues. In a few years, I’ll just sell the home.” The assumption being made here is that in a few years, anyone will be willing to buy the home at or above its current value, or at all. But in many cases, the home may sell at a loss. Worse, it could just sit on the market not selling for an indefinite amount of time. That could strand you in the house (or, if you cannot afford it anymore, result in foreclosure). So, always make sure you are buying a home that could either sell in its current condition, or which you are prepared to repair and improve before attempting to resell.
- Location. Next, you should consider the location. Is the home in a good neighborhood? Is it safe, and does it have convenient amenities? Is it quiet? Are businesses opening, and are people moving in? Are the schools good? You should ideally go with somewhere that is “up and coming” if you can, because your home is more likely to gain in value. Avoid areas that are emptying out, noisy, high in crime, or have other major problems.
- Floor plan. Buy a home with a practical floor plan if you can, not one that has a really unusual or niche floor plan. Most modern floor plans feature open layouts in the main living spaces, with the master bedroom downstairs, and the other bedrooms either on the same floor or possibly upstairs. A floor plan like this is likely a safe buy right now, especially if you plan to sell in a few years. That said, trends do come and go. There are some relatively timeless features in the floor plan type described above. But consider avoiding any trendy floor plan features that are not practical. They may go out of style in a few years.
- HOA. Buying a home in an HOA neighborhood is sometimes a compromise that is hard to avoid. The reality is though that many buyers do not love HOAs. It means paying an extra fee each month for as long as one owns the home, and having to conform to the HOA’s demands. This doesn’t mean you should never buy a home where there is an HOA. But you should at least research the HOA thoroughly before you commit, even if you only plan to live there a few years. Find out their fees and policies, as well as how they have handled issues in the past. Do homeowners like them or dislike them? Some HOAs operate fairly and charge reasonable fees to maintain community features. Others do not. A bad HOA may make it harder to resell a home later down the road. A good HOA probably is not a major concern.
- Future developments. As we mentioned before, “up and coming” can be a good thing, because if an area becomes more desirable to buyers, it can drive up home values. That means when you sell your home in the future, you can profit. But you should also consider the impact of housing supply. If a lot of new homes are constructed in the area, sellers may lose some of their power, which can keep home values from rising like they would otherwise. This may be outpaced by the rising value of the neighborhood overall, if a lot of improvements are being made, jobs are opening, etc. There is no way to entirely predict the future, but you can at least look at recent trends and future development plans. Try to make an educated guess.
Buy a Home in Florida
Assessing a home’s resale value is important, no matter what your plans are. Whether you will live in the home a few years or hope to live in it for many, you need to know you could sell if you had to. Building in exit ramps like this is what lets you confidently and responsibly move forward with a home purchase.
We are based in Cooper City, and can help you buy your first or next home anywhere in Florida. To get started, please give us a call at 954-840-8811 to schedule your consultation.
