In residential real estate acquisition, value for money is relative. What this means is cheap finds don’t always make good buys. Why do you think that is?
How do you determine whether or not a property, at its current selling price, could be a great buy?
In your quest to find prospective residential properties to buy in the market, you could come across cheap steals every once in a while, especially if you are moving into a new area. You might see a nice house, offered at $200,000, and instantly believe it to be a fantastic bargain simply because it would have been priced higher in your area.
In reality, that amount might not even be considered cheap in that particular area. If you don’t do ample research, for all you know, it might be overpriced at that value. The biggest mistake you could make is to compare prices from entirely different markets. This may sound like common knowledge, but there are a lot of people who end up buying properties in a haste just because it seemed incredibly cheap to them at the time. These kinds of buyers don’t bother asking if that sort of price is fair in that particular market.
People who visit other places while they are on holiday usually fall into this trap. The common scenario is they fall in love with a place despite all its flaws and whatnot, and end up buying it because they couldn’t believe how cheap it was to begin with. What they fail to realise is that whatever flaws there were in the beginning, need to be taken into account when negotiating the price. Yes, it’s lower than average, but is it low enough? This is the sort of thing that needs to be asked but oftentimes isn’t.
If cheap is relative, then what comprises good value? In the financial aspect, good value is buying a property in its current fair market price, or even a tad lower that that. But from a personal perspective, good value is when you buy property that fits your needs perfectly in a way that it could potentially lower your expenses in the long run. You could’ve paid a bit extra for it, but it’s worth it because the property has personal added value to you.
So next time you go house-hunting, take these things into consideration for you to get the best value for your money. Check out our listing for your residential real estate acquisition.
Photo from Heraldsun
