Homebuyers must manage a few key components during the house-hunting process. The location of the home impacts the house size, price, and style, but each neighborhood has unique qualities that may improve quality of life, such as parks, restaurants, and walkability.
Where you buy a home will also impact how the property’s value will appreciate over time, determining its resale value and overall return on investment.
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However, locations with favorable conditions and highly sought-after benefits tend to be more expensive, so first-time homebuyers may need to be flexible on neighborhoods, amenities, and pricing to stick within their budget.
Though the financial implications of a home’s location are sometimes overlooked, it may affect the resale value by tens of thousands of dollars. Berkshire Hathaway Home Services dives into how homebuyers can ensure they’re making a sound housing investment, and which property red flags to watch for.
Where you choose to buy a home could substantially impact the property value over time.
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Berkshire Hathaway Home Services explains how homebuyers can increase their ROI
Purchasing a home is a significant long-term commitment, and it is essential to understand all of the factors that impact property value over time. The average home appreciates 5.5% annually, nearly double the current inflation rate.
Research shows that home appreciation is highest in areas with a growing local economy, rising population growth, and a developed infrastructure and public transit. Real estate experts generally agree that location is often more important in determining a home’s value than the home’s appearance, since it affects homeowner quality of life.
Berkshire Hathaway Home Services highlights why the location of your home will shape its resale value, and therefore, ROI.
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The blog notes that “a desirable neighborhood offers well-maintained homes and public spaces, safety, good schools, thriving businesses, and other amenities. The more of these you have, the smarter your investment, as your home will not only hold its value, but will appreciate faster than if it were located in other areas.”
However, since desirable locations drive up home prices, first-time homebuyers may need to compromise on house size or location to stay within their budget. Still, finding a neighborhood that is on the upswing — offering advantageous perks while still being fairly affordable — is key to reliable real estate investment.
“These neighborhoods come at a higher cost, so your goal should be to obtain as many of these wants and needs as you can affordably.”
Berkshire Hathaway Home Services highlights that location can improve quality of life and property value
Although 15-year mortgages save homebuyers money in the long run, most younger home buyers opt for a 30-year mortgage to keep mortgage payments lower. When signing up for a 30-year commitment, it is important to research up-and-coming neighborhoods that offer beneficial features at a competitive price.
82% of homeowners have some type of regret about their house or the home-buying process, underscoring the importance of thorough house-hunting research.
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Berkshire Hathaway Home Services notes that finding the right neighborhood can help save homeowners a significant amount of money — and headache.
“Researching the right neighborhood for your family is important for your lifestyle and well-being, as well as your investment in a home, helping you sidestep avoidable problems and enjoy priceless peace of mind.”
Ultimately, an area with a vibrant culture, ample green space and public parks, and a growing population will almost certainly yield positive home price growth.
“That’s why location is so important, as appealing aspects will also be attractive to future homebuyers and renters, including the area’s natural beauty, historical charm, or cultural flair. It’s easier to enjoy your lifestyle if the amenities you want are readily available — from parks and recreational facilities to grocery stores and restaurants.”Â
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