When buying a home people often ask me “What about the re-sale value?” Many of us in the GVRD can’t afford to buy a single family home and live there for the rest of our lives. The fact is space is just too pricy to allow most of us that luxury.
In the GVRD we have become accustomed to the fact we will probably need to move every time there is a major life event. It only makes good financial sense because the cost of real estate is so high that we purchase a space to fit our current needs and buy a bigger or smaller space when life changes.
It’s more common for our first “home” to be a “condo”. Most of us then graduate through successive larger space purchases as we need more space; for example, when we get married, have kids, or your mother in-law moves in, we require more real estate!
And so the question of re-sale comes up a lot. Sure, we all dream of buying that affordably priced home only to find out there is a massive community upgrade planned and our property value doubles overnight! Think about the lucky home owner in Richmond that bought before the Canada Line was a twinkle in anyone’s eye and within a few months of completion values of homes near the train spiked by 30%!
The fact is nobody has a crystal ball and re-sale is mainly dependent on local market conditions. Sometimes a property is very desirable and then won’t sell. Back in ’07 when the Fraser River peaked nobody living with the once super desirable full river view property could sell as buyers were faced with sand bags and hazard tape for fear of a possible flood.
But natural disasters aside, there are a always factors that can make a property more desirable and often those things are constant over the years. Here are a few simple tips to help you avoid the common mistakes people make when they are buying a home specifically for re-sale value.
1. Busy streets, power lines, train tracks and airports
A home facing or backing onto noisy travel ways always sell for less, and take longer to sell, than similar homes on quiet properties. Many buyers will not even consider buying on a busy street because of noise and other issues, so the number of potential buyers is reduced resulting in lower prices and longer sale times.
2. Two versus 3 or 4 bedrooms
In our market a third bedroom is extremely valuable, especially if all 3 bedrooms are on a same level. Many families plan on having 2 children and want separate bedrooms and a home of the same size with 3 versus 2 bedrooms will sell for significantly more. However, going from 3 to 4 bedrooms is totally different. The fourth bedroom is never worth as much as the third and some families even prefer not to have a 4th bedroom — they view it as “wasted space” and don’t want to pay extra for a space they don’t have a “use” for
3) Irregular shaped lots
A pie shaped, pan handle, octagonal or other irregular shaped lots are always more difficult to sell. Buyers like the usable space of a traditional rectangular yard and many don’t want a fence line that joins too many neighbours.
4) Corner lots
Corner lots don’t always bring better value! There is a growing trend of buyers that do not like corner lots. In the past a corner lot was always more valuable but in the detached home market many buyers prefer the “security” of having neighbours on either side of them. However this is not true for condos, town homes or homes in a strata community where a corner property is always highly sought after
5) Small back yard versus a large front yard
Although a lot may be the exact same size the way a home is placed on the lot will greatly affect its value. Having a home set back on the lot creating a large front or side yard is less appealing than a home that is placed at the front of the lot. Home buyers often dream of a large private back yard, and a back yard that is deeper rather than wider is also more appealing.
6) Proximity to schools and services
Being near amenities like permanent facilities, community centres, libraries, schools, parks and beaches is always a safe bet. But be warned: trendy business districts can be here today, gone tomorrow. Purchasing a property near your favorite coffee shop, cute local retail store or even your favorite big box retailer may not yield resale value if these businesses don’t last.
7) Worst house on the best street
Buying the worst home in the best location is always a safe bet. Think of that one original run down bungalow left on a street of beautifully renovated heritage homes. There is always an opportunity in a great neighbourhood with a less-than-great house. But beware when considering the best house in a bad neighbourhood as most buyers won’t see beyond the latest and greatest renovations if the home is in a bad location.
Remember every situation is unique and it’s important to evaluate all aspects of your home purchase. If you know you will be moving again in a few years pay careful attention to the signs of good re-sale.
On the other hand if you are planning on setting down permanent roots (and never selling!) let your personal preferences be your guide. When it comes to personal taste, anything goes! And you never know — some people probably would love that 2 bedroom rancher on a triangular lot right under the flight path of YVR!