Property Location And Resale Value

Location is what makes one piece of real estate totally different from another. There can be no other property with exactly the same location as your property.

Before you can actually pick out a house, you need to choose what town, city, suburb or community you would like to live in. There are many factors you should pay attention to, not only for yourself, but because you intend to eventually sell the home to someone else. Carefully choosing your property "location" can help maximize your property's future resale value.

The Local Neighbourhood

The term "local neighbourhood" refers to an area wide enough to cover your residential area plus nearby stores such as the "neighbourhood grocery store."

You want to be sure all essential shops and services are located nearby. This would include grocery stores, gas stations, dry cleaners, and convenience stores. There should also be fairly convenient access to local highways, major traffic routes, and public transport.

One thing you should look out for, though, is if your local shopping centre is in decline. It could be an indicator that the local neighbourhood is in decline, too. Check to see if a lot of storefronts in your local centre are vacant or available for lease. If they are, you might want to find out if it is just because of a greedy landlord, setting exorbitant lease requirements, or if it is because of waning economic confidence in the area you are considering to buy a house.

A greedy landlord will come around and face the reality of the property's rental income potential eventually, but a lack of confidence in an area's economic outlook should set your alarm bells ringing.

Economic Stability

When choosing a community for your purchase, it makes sense to buy in a town or city with a viable and stable economy. Five, ten, or even fifteen years from now, when you want to sell your home, you want to have a reasonable expectation that your community will still be a desirable place to live.

In addition to peaceful, desirable residential neighbourhoods, there should be a healthy mixture of commercial and business districts. These not only provide jobs to the local residents, but also add an income source that the city can use to upgrade and maintain roads and city services.

In fact, you should take a drive and see how well the community is maintained. You have probably heard of "pride of ownership" when referring to an individual home, or an automobile. Look for an area that demonstrates community pride, as well.

Local Government Services

In addition to community pride, check on the services provided by local government. For example, check out the local library system, parks, public playgrounds for kids, sporting facilities, etc. Yes, it has nothing to do with the property itself, but it is a good indication of the local government's dedication to making your neighbourhood a pleasant place to live.

You should also look into local crime statistics and see how the area compares to the national average and other local communities. Is the police force effective and responsive to community needs? Many South Africans would answer no, to this question, out of principle, but make a few enquiries before you decide for yourself. Also see if fire stations are located strategically around the community, so that they can respond quickly in an emergency.

Other questions to ask include: Does the city sponsor youth sports and have well maintained sports facilities and parks? Do they sponsor community events, such as an annual parade, art or flea markets, or an arts festival? Are there activities available for children, teenagers and senior citizens?

Your local real estate agent, if they are any good, will have amassed a wealth of information on these subjects, and can provide the answers to your questions.

Schools

Even if you do not have children of school going age, and do not intend to have children soon, or at all, you must pay attention to the local school system. Remember, when you eventually decide to sell the property again, many of your potential buyers will have concerns about schools.

You will want to know if the local schools are overcrowded, have poor facilities, or a poor academic record. Call up the local school and find out if children attend the school closest to their home. If not, ask why. Speak to a few of the neighbours with children. It is not hard to strike up a conversation with a parent waiting in a car to pick up the kids from school.

Find out if there are enough schools to support the local population? If not, are there plans to build new schools? Will the new school be in the vicinity of the property you are considering buying? How will building new schools affect local property taxes?

You can ask your agent about these things, but you should also get some local phone numbers, so you can ask for yourself. You can also visit the websites for local schools on the Internet.

Property Taxes

Property taxes may be higher in one town than another nearby city, and the same goes for different neighbourhoods in the same town. This can sometimes affect whether potential homebuyers view a community as a desirable place to live or not. Often, they will choose not to purchase in a community with high property taxes, even though this decision is not always justified. Higher property taxes often mean newer and more modern schools, well-maintained roads, and bountiful community services. But then again, this is not always the case in South Africa.

Many real estate agents and prospective property buyers have a bias against areas with higher property taxes. So, if resale value is important to you, make property taxes a consideration when choosing the location of your new home.