How to Make a Good Housing Investment

When you enter the market for the first time, or for the first time in a while, it’s easy to fall in love with a home and see the details with rose-tinted glasses. Buying a new home is an exciting investment opportunity, but you don’t want to get caught up in the rush this transition can bring. Much like dating, it helps to know what you really want before you start looking. To keep from making a bad long-term investment, stick to these guidelines.

Avoid Expensive Fixer-uppers

You’ve poured over the photos in the listing, and the staging was done in your favorite style. Maybe the staircase was a bit oddly placed and the living room was a bit awkward, but you can work around that, right? Most buyers severely underestimate the cost to alter a difficult floor plan. Depending on the project, remodels tend to cost between $100 to $250 a square foot. Remodels, also, tend to cost 12% more than initial quotes and are cited as one of the most stress-inducing experiences for homeowners.

Don’t assume every blemish represents a money pit, though. Have a realistic understanding of what various fixes cost before you begin house shopping. If you dislike the carpet in one room and the paint in the other, other buyers may too. The difference is, you know these issues can be fixed at a more moderate price point. When others pass up a home with great potential, you stand to make a great investment.

Skip the Fanciest House

If shopping a particular neighborhood, don’t get anxious and jump on the first available home. If all the other properties average a lower price point, hold back. The house may seem worth the higher price tag due to a remodel or special feature, but has significantly exceeded the value of other homes in the neighborhood. Future buyers may not be as enamored by the extra amenities. No one wants to buy a home that is worth $100,000 more than the rest of the homes in the same area. Aim for the lowest-priced house in the area instead of the showiest. This will give your investment space to grow.

Keep an Eye on the Surroundings

Changing a home’s layout is difficult; changing the community it’s located in is impossible. Drive around the commercial centers near your chosen neighborhood and check out yelp reviews on nearby businesses. Do businesses seem to be doing well? Are there signs of growth? A recent study found that the presence of a newly opened Starbucks could even point to rising values in surrounding homes. Look for an area that is growing instead of stagnating. The neighborhood you’re looking at may seem untouched by trends around it, but chances are good it is only a matter of time until the neighborhood reflects the larger community.

Check Out the Schools

Maybe you don’t have kids, so reviewing local school rankings seems unnecessary. This may be a mistake. Excellent schools are a strong draw for buyers who are willing to pay more to get into the right district. Economists estimate that a 5% improvement in test scores can raise home prices by 2.5% in suburban areas. If you purchase in an area known for excellent schools, you can expect to see your home value rise.


Don’t be swept away in a market where inventory is low and you feel the pressure to buy at the first opportunity. Bear these things in mind and you’ll save yourself regret years down the road. It also helps to have professionals who can aid you in finding the right home and best investment for you. Your satisfaction is our success. If you’re looking to buy a home, give us a call at (949)-373-5834. We’d love to help walk you through every step of the home buying process.