When thinking about buying a house, it pays to remember the old adage “location, location, location”. Looking over vineyards in Napa Valley as I write this, it’s impossible to not be amazed by the profound truth of that simple saying. Undeveloped land here is selling for one million dollars an acre. True, it’s a gorgeous valley surrounded by rolling hills, world renown vineyards, dotted by charming little towns with quaint homes and shops. But a million dollars an acre? Then again, an acre of undeveloped land in New York city would most likely command an even higher price!
The importance of location just cannot be escaped, and it should always be considered when you are thinking of buying real estate. You may fall in love with a home that has everything you always dreamed of, but if it’s in a town with little growth and a diminishing population, you may be making a terrible investment.
By the same token, during your home search you may find a home that doesn’t qualify as your “dream home” because it’s lacking that pool, or dramatic master bedroom suite, or whatever you have your heart set on. But if it’s within walking distance to shops and restaurants in a city with abundant employment opportunities, good public schools, and a growing population, it may be one of the best investments you make in your lifetime.
I’ve helped many families who were thinking of buying a house, and most of them want to focus on finding a place that satisfies that warm and fuzzy feeling that makes a house feel like “home” to them. While that is obviously important, so is the potential wealth that real estate can bring to your bottom line. That can bring some warm and fuzzy to your life as well!
The best approach to buying a house is to start by identifying cities, and then neighborhoods, that have strong economic indicators that will increase the potential for your new home to appreciate in value over time. If you aren’t familiar with the area or know what indicators you should be looking for, working with a Realtor can expedite the process. Only after that should you start focusing on the actual house itself.
For the vast majority of people, buying a house will be the largest investment they make in their lifetime. It’s crazy how few people think about that aspect of buying a house! But by putting the economic factors first, you will ensure that you are making a good investment, one that will grow your wealth and help deliver long term goals.