NEW YORK (MainStreet) — When you're buying your first home, you're not just getting a place to live. You're also getting an investment. This is especially true if you have a plan to buy a starter home, then move on to greener pastures after getting some equity. So if you see your starter home as a place to start your investment nest egg, then move on, what should you be looking for? Much more than you should if you're just looking for a place to sleep at night.
Location Is Paramount
"Always start with location," says Barry Jenkins, a Realtor with Better Homes and Gardens. You can start by looking at a website like SpotCrime.com to see how the crime patterns form for a particular area you might be looking in. "Do you feel comfortable going to the grocery store by yourself at night?" asks Jenkins, who notes that he and his wife used to drive 20 minutes, because they didn't like the grocery store in their neighborhood.
Donald Artig, a New York-based real estate broker thinks that people buying a starter home should focus on getting a place in a good neighborhood or at least one that's up-and-coming. "It's better to buy a smaller house in a good location than a bigger house in a not-so-good location." He urges people to talk to their broker and ask him to steer them in the right direction. That's in addition to doing research in the local papers to see where things are selling. A lot of sales often means that a neighborhood is coming up.
Artig also notes that everyone needs access to transportation. If you're buying a house in a city, that means access to subways and buses. However, even if you're buying a home out in the sticks, access to transportation is important. But in the case of a place further out, you'll still want a house with access to commuter trains or major highways. People who buy the house are going to need a way to get to work -- as will you.
Keep Your Buyers in Mind
If you're buying a home you plan to sell in the near future, you need to keep your potential buyers in mind when you buy. Jenkins notes that one way that this plays out is schools. You might not have kids now and you might not plan to have any in the future. But if you move to a place with less-than-stellar schools, that means people who do have kids are going to be reluctant at best to purchase your home from you.
Artig says that nearby amenities are always important to buyers, especially when they're in a city. "I would look for houses near parks, open areas, water, that sort of thing," he says. "In the city, being near any body of water is always a good thing. If you can see water or a park, that's even better." You might just be buying the house as a way station until you get your dream home, but the person you sell the house to in five years might be looking for his dream home and nothing else.
"You want something with curb appeal," says Artig. So if you're buying your first home with an eye toward selling it somewhere down the line, you need to look at it in this light from the second you enter the property. If the place you have your sights set on isn't very "salable," you'll have to spend the next couple of years of your life transforming it into something a little more pleasing to the eye. Is that the level of commitment you have to your first home?
Anticipate Life Changes of Your Own
"The biggest challenge people have is with growth," says Jenkins. "In our market, we have what are called 'dollhouses.' They're really small, they have one bathroom and people always say the same thing: 'It's just for me. I don't need anything else.'" Jenkins says that the problem comes in when the customer gets married or has a partner move. "They've outgrown the house overnight," Jenkins says.
So when you're out looking for your starter home, don't just think down the road for a prospective buyer. Also think about what your needs are going t be over the time period that you own the house. That will ensure that you get a good price when you sell the home down the line, but it will also ensure that you enjoy the time that you spend in the house.
--Written by Nicholas Pell for MainStreet