A home can be not only a place to live, but a means of making a profit if you should decide you want to move. When you rent, you simply pay someone else for the ability to live in a home or apartment. This leaves you with no means to profit from where you live. Instead, you are working to make someone else money.
When you buy a home, it often appreciates in value over time, but due to market forces, there is always some risk your home could lose value. Here are some tips to maximize your chances of success when it comes time to make a profit off your home.
Location Matters. Purchasing a home in a growing city with plenty of jobs will have a much greater chance of yielding you profit down the road than buying a house in a depressed city with closing factories and a falling population. As demand grows for housing, so do prices. Neighborhoods change, and if you purchase a home in a neighborhood that’s currently going from lower middle-class to upscale, often all you need to do is wait for surrounding home prices to increase before selling.
Are You Willing to Get Your Hands Dirty? Buying a “fixer-upper” home and performing the necessary repairs can be a good way of making a profit off your home when it comes time to sell. Once repairs are completed, your house will likely be appraised for more than you paid for it, allowing you to sell it for a higher price and get back the cash you put into your home, plus more. And if you do the repairs yourself, you’ll save money and walk away with the knowledge of how to repeat the process.
Be Patient, and Track Your Home’s Value. It can be tricky, knowing when to sell your home for maximum profit. Even real estate agents can experience difficulty with such a task. Keep an eye on the economy and check your home’s value every few years. Pay attention to home prices in your neighborhood. Are they increasing or decreasing? While you won’t know for sure whether it’s time to sell, keeping track should give you a good idea.