With all the advice floating around about real estate, it is sometimes smart to step back and look at the basics. In fact, we will do it in this article.
The Basics of Getting A Good Deal on a Home
The first thing to realize is that buy a home is a good investment regardless of the timing of the market so long as the home is in good shape and you intend to live there for a number of years. Historically, real estate has always appreciated over time and there is no reason to believe that will change anything in the near or far future. If you are holding off on buying because you are waiting for lower prices, don?t wait to long. Even if you buy at the top of the market, you will see gains over the next ten years or so. As a result, the first rule is to buy when you can buy.
The second rule is the well-known clich? of location, location, location. Simply put, you want to buy in the best neighborhood you can afford. The best neighborhood is generally going to have the best schools and so on. The higher the value of the properties, the more people will strive to take care of them and so on. Buying in a bad location is a recipe for disaster unless there is some unique fact that is going to turn it into a good location.
Examples can include a government revitalization effort such as happened in downtown San Diego. In the eighties, nobody would live there. The city revitalized the downtown area and built a baseball stadium for the San Diego Padres. Construction is occurring at a maddening pace and prices are in the million dollar range. This example, however, is fairly rare on a national scope.
The third basic rule is buy in the best neighborhood you can afford, but buy one of the cheapest homes on the block. The idea is to improve the home sufficiently to make it one of the more expensive homes on the block and reap a substantial gain in appreciation. When taking this approach, make sure the money you spend on improvements does not wipe out the equity gain. Also, make sure you buy the cheapest home, but one that is still in good shape.
Although there are many other rules of real estate, these are the three that matter most. If you keep them in mind, you should end up in a good situation.