Buying a Home with Selling it in Mind
Does the idea of buying a house to sell sound crazy? If so, you might be surprised to find that there’s nothing very crazy about the idea, even if you don’t intend to sell soon. In fact, anyone who buys a home should consider its resale value in addition to all the other factors including price, location and whether the house meets their personal needs.
Of course if you are buying a house to sell it within a reasonably short time frame, this will be a business decision. You might even go into a house sale and buy a house to sell that doesn’t meet your needs at all! But then you’re going to need a good business plan that will ensure that buying a home you don’t want to live in forever is not going to backfire.
How Buying a House to Sell Could Backfire
This can happen for all sorts of reasons. For instance, you might buy a foreclosure and then find that the house was so badly maintained (because the previous owner didn’t have the money for maintenance) that it’s going to cost more than you anticipated to fix up. If you want to turn the house around quickly, you might not even make your money back.
Buying the cheapest home you can find can also backfire, even if it’s in an area you have pinpointed as desirable and popular. Houses generally sell cheap for a reason. So before you commit to the house sale, and buy a house to sell, make sure you assess the possible reasons for the low purchase price. It could have something to do with location – the house might be on a busy road; or it might be because there is only one bathroom and three or four bedrooms.
Another common reason buying a house to sell could backfire is because there are future development plans that will affect the property. This could be anything from a future freeway that will be within sight and sound of the house, to a change of zoning that allows perhaps commercial rights or high-rise buildings not currently permitted.
How to Assess if Buying a House to Sell will Work
If you decide to buy a house to sell, you need to be confident that you will be able to do whatever is required to ensure that when you resell, you make a good, healthy profit. Otherwise what’s the point?
Generally a three-bedroom house will sell more quickly and easily than one with fewer bedrooms; and two bathroom houses are more popular with those buying a home than those with only one bathroom. People need storage and closet space, and most like to have a garage, or at least somewhere to park at least one car. Additionally, homes that have good traffic flow with open spaces and lots of natural light also tend to sell more easily.
If you are going to buy a house to sell (or resell), then you need a plan to ensure you can remodel what doesn’t currently “work”. This in turn requires accurate budgeting to make sure you get a good return on the investment you plan to make.
Buying a home with selling it in mind certainly isn’t a crazy idea, but there can be risks, and you need to counter these to ensure the project is successful.
