Very often when working with buyer clients, I find they want to know why they should be thinking about resale, before they have even purchased a home. In this economy of the 21st century people are buying and selling Real Estate on the average of 2-5 years (ages 23-40), and even more often if they are just climbing the corporate ladder and are in for many relocations in a shorter period of time. This being said, in many cities in the US, with a few in the Cincinnati area, there is little to no appreciation in just 2 years time, and depending on the market, there may be even less. It’s all about your investment. That down payment you choose to invest in your primary residence. Say you buy a home for $300K and you put (these days a rare) 20% down or 60K. That is your investment. Keep the house maintained and updated, modern and you may get more than 60K back when you sell.

Then, I begin to point out some of the finer details of the concept of resale, functionality. I encourage my buyers to look for things in homes that are appealing to a wide range of people. I will use a typical example of a half-bath on the first floor in the Hyde Park area for this exercise on resale. In Hyde Park, to have a half bath on the first floor may not be a priority when you begin looking in Hyde Park for a home. But, if you buy that home, without a half bath, and put one in if it is possible, you have just added value to your 60K investment. More importantly, you have made it more desirable to the next buyer who will always see the half-bath on the first floor in Hyde Park a huge perk, thus selling your home much faster than others. Resale!

Say you choose not to add that same half-bath, and you live there for 5 years. All of your neighbors and other homes in the similar area and price range have “updated” their homes with the modern convenience of the half-bath and you have not. Do you think your home on the resale market will sell faster and for more than your original 90K investment? In these sub-modern conditions compared to other homes that are updated in this price range, the answer would be no.

While I am not discouraging you from buying a home that needs a half-bath, or updated kitchen, or new garage, I prefer to use these outdated homes to allow my buyers to get a good price for their condition, and allow them to capitalize on these things and turn them around to become an opportunity to create some additional value when they themselves add these items to their home.

I prefer to educate my clients on the benefits of resale and keeping the home modern and maintained. Just as you are the buyer choosing your new home, would you expect to play less for a home with a 30 year old kitchen? Yes! But you could buy that home at a reduced rate due to the age of the kitchen, put your money saved into the upgrade, and make it new and beautiful, and when you go to sell, you have a fabulous kitchen that you have enjoyed while you have lived in the house, and your home will sell faster and hopefully for more money because you updated it! This concept is referred to as “Sweat equity” – making improvements yourself that hope to directly increase the value of your property. If you cannot make these necessary updates, you cannot expect to make more money when you sell the house if you have not invested yourself to modernize and maintain the house. It will also add months to the sale process for a home that has not been updated.

These things inside the home are important functionally. Now let’s look at socially. When you invest in Real Estate you need to understand where the demand is in your city. Where do people want to live and play? Buy a home there. If your goal is to have a great return on your home, buy in an area that others want to live, which will bring a faster sale for more money. If you buy 30 minutes from the city, know it will take quite a bit longer to sell the home and your margin of profit will be less, this is the rule of supply and demand.

Lastly, consider economic resale. This often parallels social in that the demanding areas usually have a higher Return on Investment, less days on the market, closer to asking price for the homes, and a higher percentage of appreciation annually.

For all these reasons, it is key to consider resale before your current home purchase, to protect your investment. That is, assuming that you want to make money on your largest asset, and sell it quickly, with the least disruption in your families lives!

If you are in the market to sell your home, and wish to talk to ME about getting the best Return on your Investment, give me a call anytime at 377-3637.

If you would like to know what you can do to increase the value of your investment in a few years when you will sell, call ME today and I will be happy to stop by your home and give you a few suggestions, give me a call anytime at 377-3637.

If you would like to buy a home with a strong Return on Investment, give me a call today and I will lead you in the right direction to turn your home into your largest asset and investment, call me anytime at 377-3637.

Related...

• March 24, 2008 -- Increasing Property Value to Sell
• April 14, 2007 -- Market Analysis: Apprectiation and Treating Your Home As An Investment
• August 13, 2008 -- Home Sales are Key to Economy
• May 23, 2008 -- Cincinnati Real Estate Market Update