Most homebuyers have an expectation of buying a bigger and better home someday in the future. There are many things that should be considered when buying a home, and resale value is an important factor in the decision-making process. You will, after all, be using the proceeds from selling one home to buy the next home.
No one can guarantee that your home will grow in value, but there are some steps you can take to maximize your potential gain. Who has not heard of, "Location, Location, Location"?
"Location, location, location," is tired old phrase in real estate literature, but what does "location, location, location," actually mean? And why on earth repeat it three times?!
"Location" is repeated to emphasize its importance. This is what makes one piece of real estate totally different from another. There can be no other property with exactly the same location as any other. It is just impossible. Location is also a constant characteristic of a property. You cannot change a property's location at will. Although a big explosion on a seismic vault might theoretically turn desert farmland into beachfront property, and developments on nearby real estate will affect the value of another.
Location is extremely important to the resale value of your home. The idea is to buy a house that will appeal to the largest number of potential future homebuyers. A careful choice of location can minimize potential negative influences on future resale value, and maximize positive influences.
Focusing on resale value requires you to make several different "location" choices. The first choice you have to make is "which province in South Africa?", then "which city or town in the X province?", and "which suburb in X city, and so on and so on.
By choosing a location that has appreciated in value at an above average rate in the recent past, you get a property that is likely to repeat those value gains.
Home With a View
Homes with a pleasant view of the horizon often sell at a premium, far above similar homes without the view. However, if a view is important to you, buy it mostly for your own pleasure and not as an investment. Though you may place a considerable value on the view, future buyers may not agree. It may take you longer to find a buyer when it comes time to resell the house. Or you may end up dropping your price to nearly match other sales prices in the neighbourhood.
In short, if you are buying a house with a view, try to pay as little extra as possible. Otherwise, you might not get your money back.
Landscaping
Even though most real estate value is usually concentrated in the building, the erf (lot) is important, too. To be able to attract the largest number of potential buyers, the erf should be as level as possible. The typical neighbourhood rectangular erf would also be most appealing, rather than odd shaped lots or oddly situated erven.
Erf sizes are smaller for homes in modern neighbourhoods than for homes in older neighbourhoods. But there should still be a decently sized front and back yard. Think twice about buying a house where the entire back yard is taken up by a swimming pool, for example.
Also avoid over-landscaped properties. You would normally pay a premium for the landscaping, but you may not be able to recover that money when you sell the property again. You will get your best value if the house is moderately landscaped or under-landscaped for the area. You can always improve the landscaping during your ownership, and create value by establishing a decent lawn and improving the garden by adding bushes and trees. Just do not spend too much on landscaping the erf either.
House Size
The typical property in every residential neighbourhood will vary in size and number of rooms. If resale value is an important consideration for you, you would be wise not buy the largest house in the neighbourhood. When determining market value, the homes nearest to yours are most the important. If most of the nearby houses are smaller than your house, the fact that they sell for lower prices can act drag down the appreciation of your big house.
On the other hand, if you buy a small or medium house compared to others in the neighbourhood, the larger homes can help "pull up" your property value. This is one of those times where determining your "wants" versus your "needs" can be extremely important. Buying what you need in a more prestigious neighbourhood may provide more financial reward than getting what you want in a less desirable neighbourhood.
Bedrooms and Bathrooms
Three and four bedroom houses are the most popular among homebuyers, so if you can stick in that range you will have more potential buyers when it comes time to resell your property. Five bedrooms are okay too, as long as you do not have to pay too much extra for the additional bedroom.
Two bathrooms in a home have long since become a necessity, rather than a luxury, for most families. So, make sure that your property has at least two bathrooms in the house; two and a half would be even better. One bathroom with a place to wash up for day-to-day visitors, one for the master bedroom, and at least one bathroom to be shared by the other bedrooms. Multiple bathrooms are just more practical than a single bathroom, and the majority of homebuyers can easily appreciate this feature.
Closets, Garages and Laundry
Walk-in closets are extremely desirable for the master bedroom. For the rest of the house, also be sure there is plenty of closet space. Don't forget space for linens and towels. If a property does not have much closet space, but the rooms are big enough to add built in closets later, you might be able to add considerable value for a relatively small investment in home improvement. But be sure that your purchase price reflects the lack of closet space when you buy.
Garages add to the resale value and you should always make sure to get at least a two-car garage. Lately, three-car garages have become desirable in some South African neighbourhoods. But you'd have to carefully consider a garage addition if properties in your neighbourhood do not typically have the extra garage as well.
A separate laundry area has also become a necessity for many households, even if the laundry area is not exactly a separate room. The days where momma was happy to stick the washing machine in the second bathroom have gone. Most homebuyers prefer a dedicated laundry area, rather than impeding their use of a bathroom with an obtrusive hunk of washing machine that takes up a large portion of the bathroom floor. The laundry facilities should be located somewhere convenient on the main floor of the house, but not in a place it will create an eyesore. Think about whether you want to walk up and down stairs, or even in and out of your house, when carrying loads of laundry. A laundry should be practical.
The Kitchen
In South Africa, and probably most other countries too, family activity centres mostly on the kitchen. The kitchen is therefore the most important room of the house for many South African families. Larger kitchens are usually better, and every kitchen should provide the major "modern" appliances. This does not mean Internet capable toasters and fridges, just that you shouldn't feel like travelling back in time when you want to prepare some food. Obviously, the dining room and breakfast nook should be located adjacent to the kitchen. In newer houses, the family room should also be extremely close to the kitchen, so mom, or the family chef, does not feel alienated an banished to cook in solitude in a far off kitchen.
There should be easy access to the back yard from the kitchen, as there will be occasions for outside entertaining and braais. The kitchen should also not be a mile away from the garage. Hauling groceries to the kitchen from the car should be a short trek, so it does not become a horrendous chore.
Swimming Pools
Swimming pools do not add as much value to a property as many owners think. Families with younger children have safety issues with pools, because infant drowning have become more publicized than in the past. So, families with small children tend to avoid homes with pools, or expect super safety measures, if a property does have a pool.
Most homebuyers that have owned a property with a pool before, know that that glittering pool of relaxation in the back yard is a b!#@# to keep all sparkly, sometimes. A few bolts of lightning can turn sparkly blue waters into pea soup in a matter of moments. So, not every buyer will see your pool as an irresistible asset they would be willing to fork over extra money for.
As a result, having a pool may actually reduce the number of potential homebuyers when you try to resell the home. A swimming pool that adds something extra in the way a living area, or outside entertainment area works or feels, will have the best chance to recoup the initial investment. So, be on the lookout for a pool that gets incorporated into the home in some way, rather than a puddle at the bottom of the back yard, if you decide to go with a pool.
You have to realise that your pool may not add to the value of your property when selling. Buy a home with a pool for your own enjoyment, not as an investment.
Also, if you want a home with a pool, it would be best to buy a home that already has a pool. If you decide to pay a contractor to install one for you, be sure that you know that your expensive home improvement may never even improve the value of your property. It can be like throwing money in the water, unless you decide that the expense is worth it, for your own enjoyment of the pool.
Buying Property With Good Resale Value
There are many aspects to keep in mind when looking to find a propert that will offer good resale value, someday when you need to sell it again. The golden rule is: extravagance very seldom recoup the initial investment. Oh, and of course the "location, location, location" thing...
