Today’s “Ask the Expert” column features Vik Raghavan, the CEO of GrayRoost.
Q: When looking to purchase a home, what factors need to be taken into consideration to ensure your new space meets both your short-term and long-term needs?
A: When purchasing a home, several factors go into determining whether it’s the best property to purchase in terms of investment value and also whether the home will meet all your short-term as well as long-term needs, depending on how long you plan to stay in the home.
The value of the home will be determined by many things, including the age of the neighborhood, the quality of the schools, the size of the home and lot, the demographics of the neighborhood, and, if you’re looking at a new home, the reputation of the builder. A mature neighborhood with homes built at different times will generally hold better home values than a newer neighborhood. You can also determine whether a neighborhood is a good one based on the ratings of the schools. GreatSchools™ rates schools based on standardized test results for each grade and student category. These school ratings generally predict the standard of education in a particular school, which in turn, usually helps determine whether a neighborhood is a good investment bet. For example, it’s a well-known fact that the San Francisco Bay Area cities of Cupertino and Saratoga are great school districts. This explains why home prices in these two cities are generally much higher than surrounding areas, and also why it’s a much safer investment than a neighborhood with a much poorer school rating.
Other things to look out for include the size of the lot that the home is built on in relation to the size of the home. Also, if it’s a new home, it’s best to research the reputation of the builder. Some builders are notorious for using poor-quality materials or having terrible customer service when things break within a few months of purchasing the home.
The demographics of the neighborhood are a great indicator of who your future buyer is likely to be. Neighborhoods comprised of small families and singles tend to feature smaller homes. Such neighborhoods see a lot of real estate turnover as people relocate when they outgrow their homes. However, given the transient nature of these populations, they tend to be great places to buy rental properties. Additionally, the lower price point tends to attract more homebuyers.
Based on the aforementioned factors, it may not always be feasible to purchase the best home for you and your family if it’s beyond your budget. However, you can always enjoy the perks of living in a particular neighborhood within a specific school district by renting a home. That option opens up a wide range of properties that may otherwise not be available to you. And if you have your heart set on a particular neighborhood, monitoring home prices in the housing market that you’re looking to enter can help you get into your dream home.
For more information, visit www.grayroost.com.