Real estate can be an incredibly valuable investment. Whether you’re buying your first home or investing in an income property to make money from rent, real estate holds a lot of potential for growing wealth and income generation. It’s no wonder, then, that experts tend to recommend owning real estate.
With that said, though, not all real estate investments are created equal. When you make the decision to buy a home or an income property, you’ll be faced with all kinds of smaller decisions related to your purchasing plans and your new property’s maintenance needs.
How you react goes a long way toward determining how much value you can get out of your real estate purchase. With that in mind, let’s explore a few key factors and decision points that can make or break the value you get on your investment.
The real estate market tends to go up over time, but not all locations are prime spots for sitting on a valuable property. Depending on where you buy, you could end up with a home that depreciates as you own it. Or, worse yet, an income property that fails to generate the income you were hoping for.
Whether you’re thinking about a first home purchase, a vacation property acquisition, or an income property deal, you need to be thinking about location. Some areas simply offer more growth in real estate than others, explain experts who offer North Carolina mountain homes for sale.
Buying at the right time
Location is not the only factor, of course. It also matters when you buy. There are two factors to consider in terms of the “when” of a real estate purchase.
One, naturally, is the real estate market. While the real estate market tends to go up over time, it certainly has its ups and downs. You’ll enjoy the maximum upside when you buy during a “buyer’s market” and sell during a “seller’s market” — that is to say, buy low and sell high.
You should consider your own life, too. Just as important as good timing in the market (indeed, perhaps more important) is timing your real estate purchases within your personal and financial life.
Buying your own home, for instance, makes the most sense when you have plenty of spare cash for a down payment and you’re not planning to move anytime too soon. If you move within a couple of years, the closing costs are going to outweigh your mortgage-over-rent savings.
Maintaining and improving your property
So far, the emphasis has been on where and when to buy. But what you buy is just as important, and what you eventually rent or sell (or just enjoy in your daily life) is, too. One of the best ways to maximize value on your property is to invest in maintenance and improvements.
When it comes to regular maintenance, being proactive is key. Preventative maintenance is exactly what it sounds like, and preventing problems before they happen is a whole lot more cost-effective than waiting until disaster strikes to make big fixes.
As for improvements, such as redoing the roof or hiring a composite deck installer, they can really add to the financial value of your house. So if you’re on the fence about a new home improvement project, consider that you might get some (or even all) of that improvement’s cost back if and when you sell your home. The math is even more compelling for income properties and vacation properties that you might rent.
These aren’t the only ways to maximize value in a real estate investment, but these major categories will cover most of your bases. Invest wisely and make the most of your property.