Your Primary Residence
You can Absolutely Make money on your home
Remember that money is made on the purchase. Buy your house right to make sure you come out ahead when it’s time to move out and move on.
What you’re looking for:
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A home that works for you:
Looking for a primary residence is a big deal! This is an investment in quality of life more than a “deal” to squeeze the maximum ROI out of. Make sure that the house you’re buying works for you for the timeline that you’re planning on being in the home. Be clear on your needs vs your wants. Buy only what you need.
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Not too much house:
Don’t bite off more than you can chew This is a recurring theme in real estate. It’s far better to underspend on a house that you can afford and overpay on your monthly mortgage to improve your equity position. Just because the bank approves a loan doesn’t mean you should use it.
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What you can fix:
Sweat equity is real. You got this. Buy a house that’s slightly outdated so you can upgrade it to your liking. (Make sure you’re not overspending on your upgrades, consult your agent and your comps) Renovations to your kitchen, bathrooms, floors can drastically improve the value of your home.
What you need to decide:
Where will you live?
Location, location, location.
This is the single largest determinant of value. The house must work for you and your current live/work situation. How far is too far? Consider public transit. Your homes value is tightly linked with your neighbors. A smaller house in a better neighborhood is likely a better investment than a bigger house in a worse neighborhood.
How much work?
DIY or hire a contractor?
Either way, make sure you know what projects you’re willing to take on and which one you’re willing to hire out. Think of your upgrades as you’re touring houses. Your highest returns are going to come from redoing the kitchen and bathrooms. Look to replace old cabinets, countertops, and inserts.
How will you finance it?
Consult your lender! An FHA loan may be the lowest down payment you can get but there are advantages to a conventional loan as well. Weight your options before you purchase.
Make sure you use your FHA loan for the interest rate advantage. Go the conventional route to get PMI taken off faster if you plan on overpaying each month.