Buying house is considered one of the biggest investments for any. It goes without saying that the decision should be made after careful consideration of a multitude of factors, most of which, would quite understandably, pertain to your immediate needs. However, is that all you want to consider when buying house?
Although it’s prudent to gauge before buying a house on the basis of meeting your current living requirements, it would be advisable, that you take this as an important financial investment with a prospect of earning potentially high ROI in the long run.
Hence keeping this thought in mind, you should consider some additional points before you embark on the purchase decision.
What if you have to move to another location or to another home? What if you need to sell the house in future? Does it grow in value over a period of time and earn you the benefits of real estate appreciation? What capital gains will it earn in near future?
Considering the resale value of a property should definitely feature on your property assessment criteria.
Some tips for evaluating the resale value of a residential property:
1. Location- A good location for a buying house is often defined as a residential area, close to all your daily amenities and yet comfortably away from the humdrum, noise and air pollution of a congested commercial area. Home buyers look for easy accessibility to public transport, schools, colleges, hospitals, shopping centers, etc. Another factor to consider is the current rate of development with additions such as shopping malls, grocery stores, or any commercial development like facilitative public transport, around the area, that might put the locality in demand going forward. It’s a wise decision to buy a house located close to a metro corridor where in future metro construction may take place and once the metro line is up and running, your property can see remarkable appreciation.
2. Size and shape of the plot- The shape and size of the plot on which the house is built can also be an important factor from a resale point of view. A plot with irregular shapes like a triangle or with an odd number of corners might not appeal to future buyers. Square shaped or rectangular plots are best when it comes to finding a good resale value. Additionally, a plot which is “Vastu” compliant can reap good benefits at the time of resale. For example, the direction of the road and facing of the entrance gate is significantly checked by Vastu sensitive buyers; the 5-cornered plot is not considered auspicious, etc.
3. Buyers in the locality- Before buying a house it is a good practice to evaluate your neighbors in the area. If the area is attracting a certain age group like families with kids or newly married couples or senior citizens or is it a blend of age groups with a healthy mix of professionals & regional ethnicities. Observing such facets will allow you to evaluate the locality and its suitability for any particular set of buyers. Newlyweds generally buy a house that is small and under budget, young couples would like to buy a place which is convenient and close to schools/colleges, senior citizens again might be looking to invest the amount gained after retirement and for them hospital around is a must.
4. House Layout- The design of the house does matter and adds up to the price appraisal at the time of selling. In units with two or more bedrooms, check the floor plan for bedrooms sharing walls doesn’t facilitate better privacy and thus might land you to an undervalued position at the time of sale. Also, avoid awkward layouts that reduce usable space. For example, a long hallway, Pillars and columns etc. can occupy a significant amount of a unit’s square footage. Angled walls that create irregularly shaped rooms generally make furniture placement difficult. Locations of pillars often pose a difficult decision for many Indian buyers following Vastu. Interior bedrooms that don’t have windows are also unappealing. Also, look for units with at least two bathrooms, so guests can use a separate bathroom.
In the case of multi-level houses or duplex, at least one bedroom and the bathroom is necessary for the first level. Attached bathrooms are almost a norm for any buyers so the house should have at the least one attached bathroom, preferably for the master bedroom. The kitchen should ideally be located in the first level and next to dining room for convenience. Open-concept over boxed kitchen appeals to many young home buyers, but the elder generation before buying a house might prefer the latter one. Having enough car parking space is a must and will only add to your investment. Having multiple balconies is a plus point too.Thus, always aim for a house with a convenient and effective layout as a practical plan never goes out of demand.
5. Avoid outdated features- Yes, future is unpredictable, but if you’re already buying a house that is considered outdated at present then it just can’t appeal to the buyers in future. Houses without attached baths can be hard to sell while bedrooms with wooden flooring are the latest fad; hence can be appealing even after few years from now. Consider interiors and their value in proportion to the present market demand. But if you plan to remodel and revamp the house then you may just have to worry about the additional costs.
6. Storage space- It’s the twenty-first century and space constraint is no longer a fiction for many households. Hence, lack of space to store can become a bottleneck to sell your property. Buying a house with enough storage in bedrooms, kitchen, and every possible place in the house including underground storage if possible.
7. Quality of materials used for construction- It goes without saying that most people are likely buying house based on the convenience and interiors. But building materials used during construction of the house can have significant ramification to your living conditions and later become an important consideration while estimating the resale value of the house. If the construction quality deteriorates sooner than you thought it would, it will not only add to your stress levels but also dig a hole in your pocket with repair work and renovations. Buyers would normally be evaluating the following:
- Cracks on the walls or plaster
- Plumbing issues, including water pressure taps and showers
- The condition of the roof (rust, broken tiles, patching)
- The condition of drainage systems
- Electrical wiring issues
Thus, it becomes imperative to ensure that your builder or contractor has given particular attention to the standard of building materials used for the construction and avoid undue surprises in the near future.
Look for materials compiled with the latest technology of its time. For example, sustainable building concept is catching up and hence it makes sense to see if some of the materials used are eco-friendly and non-toxic. Use of hollow bricks like Porotherm Smart Bricks or similar walling material which are natural and provide excellent insulating properties promoting energy saving can qualitative improve your property’s resale value. 67% of all the electricity that’s generated is consumed in lighting and adjusting house temperatures like heating and cooling. Doors and windows are majorly responsible for the heat loss in a wall and thus it lowers the overall R-Value of the wall. Hence look for a home with correct and strategized position of doors and windows as this will help eliminate air infiltration. All this will make certain that the future buyer would be impressed with a high tech, energy saving and environmentally friendly house.
Apart from bricks, the wood used for the furniture, the flooring, kitchen and bathroom faucets, roof tiles etc. all must be carefully examined and evaluated for cost vs. benefit they will derive in the future.
8. The appeal- A building’s architectural appeal is its strongest point in holding the attention of a potential buyer. The exteriors, the aesthetics, the quality of roofing done, the landscape of the house, etc. everything matters. Once you buy the house there is definitely scope for improvement like painting, adding façade to the walls or replacing the roof with clay tiles. Though all this may cost extra to your pocket, but will be evaluated at the time of resale. Moreover, some of the things cannot actually be undone or involves huge investment to remodel or huge destructions …like the walls of your rooms for example.
So consider all the cost you might incur in buying house and a resale value for the same and decide on the move.
In the end, buying house doesn’t necessarily mean a closed chapter in your life, but rather a stepping to stone to future possibilities…
Authored by a building expert from Wienerberger India
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