Buying a house, condo, or any real estate property is one of the most significant financial decisions you will make in your life.
Why? Because buying a real estate property can impact your finances and lifestyle for many years.
In case you do not know, buying any property does not end with just a downpayment. You have to pay monthly mortgage and land taxes, among others.
If these are not well-taken care of, you might end up bankrupt and homeless.
Hence, before you buy any real estate property, you need to consider the following factors:
Type of Property
Before you buy any property, you need to consider what type you would like to have:
Residential properties are meant for living. It is considered the safest real estate property to invest in.
Commercial, Retail, and Industrial
These are any properties that are meant for business. They can be expensive but offers a hefty profit margin.
The only caveat is that it has a high-risk of vacancy. More so, now that there is a pandemic and business operations are limited.
Where your property is situated is perhaps one of the most critical factors you should consider.
For one, it can affect your lifestyle. Living in an exclusive subdivision, for example, could mean that you will need to have a car for ease of transportation.
Another reason is that location can affect the cost of real estate properties. Commercial and urban areas are more expensive than buying a property in a rural area.
Moreover, your property’s location will be a great asset, no matter how the market fluctuates. This means that an unkempt house in a good area can still be worth the purchase. Luckily, there are websites like LandHub.com wherein you can search for properties based on location and types.
In relation to the location, you should also consider nearby institutions. This can be your office, school, mall, grocery, farmer’s market, and church.
Here’s the thing: Living in a place where everything is nearby can help you save transportation money. You can also save time because you will less likely be stuck in traffic.
This means more money and time that you can spend for you and your family.
The key here, though, is considering the thing that matters to you and your family. That’s because, for someone who lives alone, his priorities may be different from a family man.
Once you are settled with the location, the next thing you should look into is the neighborhood.
Checking out the neighborhood gives you an insight into the people’s lifestyle.
Is the place family-friendly? Do most of them own a car or commute to work? Where do the majority of kids go to school? Is the neighborhood quiet enough that you can work-from-home in peace?
Moreover, it would be better if you meet some of the neighbors. That’s because they have first-hand experience of the facilities and people living in the area.
They can also help you if you have concerns about the homeowner’s association.
Speaking of the neighborhood, you might also want to consider its safety. In particular, you should look at the neighborhood’s crime rate.
Luckily, such information is available online.
Doing so is an excellent way to invest in you and your family’s safety. Plus, a crime-filled neighborhood is not a worthy investment and can lead to property depreciation.
Depending on your purpose of buying a real estate property, it is also vital to look at the property valuation. It is the process of forming an opinion on how much a house, apartment, or condo can cost.
Some of the standard real estate valuation are:
- Sales Comparison Approach: Compare how much a property costs versus other properties of similar types within the area.
- Cost Approach: The cost of land and construction, minus depreciation.
- Income Approach: How much you can earn in case you want to rent or sell your property in the future.
Green Open Space
According to the World Health Organization, air pollution kills an estimated 7 million people worldwide annually. Hence, it is advisable to look for a property that has a green open space.
Before settling with a downpayment and signing over the dotted line, take the time to stroll in the neighborhood. Look at how the houses are landscaped, whether there are trees, and if they have a park.
If not, ensure that your prospective property has ample space for urban gardening. Doing so adds a lush scene in the vicinity, which can help boost your mental and physical health.
Available Mortgage Arrangement
Sure, buying a house can be exciting. But knowing how to finance it can be overwhelming.
Hence, it would be ideal to know what mortgage arrangements are available before buying a property:
- Conventional Mortgages. It is confirming or non-conforming home loans that are not insured by the federal government. This is ideal if you have a stable income and a healthy credit score.
- Jumbo Mortgages. It is a conventional mortgage type that has non-conforming loan limits. This is ideal if you have an affluent income and can afford a substantial downpayment.
- Government-insured Mortgages. Depending on what you need, you can apply for a home loan from government bodies like the Federal Housing Authority. This is ideal if you have low cash savings and a lackluster credit score.
- Fixed-rate Mortgages. This is a home loan that carries the same interest rate, regardless of your loan terms. This is ideal if you intend to stay in your property for at least ten years.
- Adjustable-rate Mortgages. Also called ARMs, this is a home loan type with a fluctuating interest rate. This is ideal if you only intend to live in your property for a couple of years.
Say, you finally found a worthy real estate property. What is the next thing that you should do?
The next step is to inspect your new house, apartment, or condo.
At Planet Maids House Cleaning NYC, we always advise clients to check light provisions, leaky pipes, and other things that might need fixing. This includes saggy ceilings and moldy walls.
That’s because this can affect how much a property can cost. After all, a fixer-upper house means you will need to spend more with repairs and renovations.
As mentioned earlier, buying a real estate property is one of the most significant financial decisions you will make. Hence, it is imperative to consider the factors stated above. Doing so ensures that you are buying a property that is worth the investment.