For first-time homeowners, there are questions you should be asking yourself even before you think about your financials. That’s because, without solid answers to these questions, you won’t be able to budget properly nor get the most out of your money.
These questions include: Is location really important when buying a house? What sort of features should I be looking for? Should I think about how my purchase will affect me in the future?
Meanwhile, here are some of the most important factors that first-time homebuyers should consider before buying a house:
Location, Location, Location
If you’re wondering whether location is the most important factor in buying a house: yes, it is. And here’s why.
Your future home’s location is not only going to determine its sticker price, it’s also going to determine your quality of living, cost of living, and future investment opportunities, if there are any. Your future neighborhood is going to determine how high your initial capital will be. After all, houses in neighborhoods with high crime rates are almost-always going to be cheaper than houses in nice, suburban developments.
Sure, you can probably get a 3-bedroom home in a shady part of town for 70% of the price for a house in a premium suburban development, but the trade-off is your health and safety.
Location also determines how much you’ll be spending in terms of taxes, commutes, the groceries you’ll be going to, public works like sewage, water, electricity, etc. These will all play a huge role in determining not just what you’ll be paying up-front, but what you’ll be paying for in the future.
Balance out what you’re willing to pay with what you think you’ll be paying for in the future and base this on the location of your future home.
The Perfect Features
It’s so hard to answer what the perfect features are for a home because this varies from person to person and from household to household. When you’re thinking about the perfect features of your home, make two lists: one list is all about perfect features that fulfill your wishes, and the other is a list of perfect features that fulfill your needs. What’s the difference?
Well, your wishes are features that add some sort of aesthetic pleasure in you –or as Marie Kondo would say, ‘sparks joy in you’ –or basically just features that you just like. This could be anything from a breakfast nook, a window that opens to the morning sun, an expansive garden, etc. To further simplify, these are features that aren’t exactly useful, but it adds value to your life in different forms.
The second list are features that fulfill a need. These features are practical, useful, economical, and utilitarian. These are features that could range from its location from schools or parks, modern plumbing systems, etc. Again, these features will all depend on your personal wants and needs, so take this into account.
What’s in It for You?
Finally, when considering a house, think about your ROI, or return of investment. Yes, even houses that you plan to live in or turn into a homestead will have an ROI.
Think of it this way: if house A is worth 50% less than house B, but it’s farther from schools and hospitals and the commute will cost you more, then your investment in that house will yield negative returns in the long run. While house B, which is 50% more expensive but is closer to these other locations, will eventually pay for the difference because of the money you save on the commute.
Answer these questions and balance them out with how much you’re willing to pay and how much you have saved up, and you’ll be on your way to getting the most out of your money when buying your “dream” home.