In our last blog, we’d dissected the best techniques to find a valuable property that acts as an investment. Today, as promised, we’re going to delve into what you should avoid. After all, when you opt to purchase a property through a jumbo or super jumbo mortgage, you’re making a huge financial move. In a sense, you’re putting a lot of eggs into one basket – metaphorically speaking. So it’s important to make sure that you find the right metaphorical basket to stow those eggs.
The Wrong Investment
In the same way that picking the right home can earn you tens of thousands of dollars, picking the wrong home can cost you tens of thousands. As we’d just mentioned, you should monitor the market and avoid price crests.
Look for Deterioration & Maintenance
You’ll also want to avoid homes that’ll require maintenance. Be sure to get a thorough inspection. Check the foundation, the roof, the siding, major appliances, septic, sewage, and plumbing; and check the HVAC system. Maintaining or replacing these elements of your home can be uber expensive. Read more about the most expensive home maintenance costs in this Home & Garden article.
Monitor Local Business
If local businesses are failing and homes are flooding the market, that’s not a good sign. Although you may be able to take advantage of this situation (the market may turn around after all), it is a risk. Avoid investing in a town if a major business has just collapsed. For instance, if the town’s famous tech company recently flopped, you’ll want to look elsewhere.
Monitor the Market
As we’d mentioned last time, you’ll want to monitor the market. There are several websites you can utilize to check for current market conditions. Try using zillow.com if you’d like. The “Zestimate” feature allows you to look at projections surrounding your home value. Look out for market trends that show that your prospective home’s price is cresting. Instead, look for a home whose price is in a trough, or a home whose price will steadily rise in the upcoming years.
Location, Location, Location
We’ve heard it time and time again, but location counts. A good neighborhood pulls down a higher price tag, while a bad neighborhood – well – sinks the value of its homes. Don’t seek out a home in a neighborhood that appears unsafe or unfriendly. If the surrounding homes are dilapidated, you may want to guide your gaze elsewhere.
Make Smart Negotiations
If you’ve found a home that you love, but the price tag’s a wee bit heavy, try negotiating. Don’t get too committed to a home in this situation, you may not be able to negotiate down to the price you’d like. If your seller won’t budge and you won’t budge, simply walk away. There are plenty of fish in the sea.
Well, we’ve covered smart investing, and investments you should avoid when you choose to pour your finances into real estate. Now get out there and start searching! Happy house hunting from us here at MortgageBase, your jumbo and super jumbo home loan lenders.