Okay, so we've been feeling a little bad in the past couple days about all this talk about resale value. The very nice couple who were the previous owners of our pending house accepted our offer because we are going to live in the house. We believe that they received many offers, some possibly higher, some possibly cash, but they wanted to pass it on to a young couple who could love it as well as they did. They are giving us the opportunity to live in their beautiful long loved and lived in home and here we are talking about resale value.
The truth is, we really are looking for a house to live in for the next five or so years and we never would have felt right if we didn't find something that we really loved, regardless of the resale potential. After all, no matter how much money we might make off any given house in the end, we still have to live in it in the meantime. Remember our needs vs. wants list? Here are a few things we were committed to (to one extent or another) for personal reasons:
Craftsman or Other True Portland-Style Home: If we're going to buy a house in Portland we might as well make the most of it. We can live in a raised ranch anywhere! Plus they are just so lovely.
Front Porch: A place to sit out and drink your coffee in the morning. What more could a person need?
Yard: We're looking forward to dogs and kids in this house. A yard is a must.
Public Transportation: We share a car and need to be able to get to school and work on different schedules. Buying a house within walking distance to good public transportation is a huge benefit.
Neighborhood Feel: We have been known to stop in front of houses we are interested in and roll down our windows. If it we hear road noise, voices and music we're out. If we hear the rustle of the trees and smelled barbeque we're pulled right in.
That being said, it really is absolutely necessary that we think about resale value when we think about house shopping. We have to accept the fact that we almost definitely will not live in whatever house we buy for the rest of our lives. Our families are on the East Coast, and someday we will want to rejoin them there. It is difficult being the only members of a family on your coast. We want our future children to have a relationship with their grandparents and aunts and uncles and we want them to grow up in close proximity to the educational possibilities that the East Coast holds. Even if we were to decide to stay in Portland for the long term, there is a very good likelihood that any house we buy now will not be big enough for us for more than a few years. The plan is to live in this house for five to ten years, and we want to ensure as best as we can that we will be in a good financial position to move on with our lives when we sell. The goal is not even necessarily to make a profit, although that would certainly be nice, we just want to ensure that we're not going to hurt ourselves by having to sell our home without giving it much time to naturally appreciate.
Fortunately for us, the things listed above that we are looking for in a house also contribute to resale value. They are things that many buyers in Portland will want when looking to buy a house. Of course you have to consider what market you're buying in. Buyers looking to live in a one bedroom house on a busy shopping street or in a condo downtown won't be looking for all the same things that buyers looking for a family home will be looking for. For our market (the small family home in the city), we felt like there were some specific things that our future buyers would be looking for.
Click below to see all the things that we've been considering during our house shopping:
Neighborhood: Not only is it important for us to find a neighborhood that is quiet and friendly and within walking distance of public transportation, but it is important for us to consider what our future buyers will be willing to pay to live in a particular neighborhood. Since we're planning on fixing up whatever home we buy, we need to be sure that the people looking to live in our neighborhood will be willing to pay the price we will need to ask to make our money back on our renovations. Things we considered in each neighborhood were:
Average House Size: You never want to be the biggest house on the block. If a house was small and we knew we'd have to expand we would only consider it if the other houses in the neighborhood were generally larger. If every house was tiny, we'd move on.
Average Home Quality: You also never want to have the nicest house on the block. If every house has chipping paint and a ragged lawn, chances are people looking to buy a nicely remodeled house will be looking elsewhere. It sounds superficial, but a good way to check for this is to look at the cars parked on a street in a neighborhood. If people aren't spending money on their cars, there a good possibility that many of them aren't spending money on their homes, either.
Schools: It is possible that we will never have school-aged children while we live in this house, but we are still considering the qualities of schools in the areas we are looking in. Many buyers will pay to live in a good school district, so not only will it increase the possibility that someone will want to buy our house because of the schools, but it will increase the overall quality of the neighborhood. Go to www.greatschools.com and the local school system website. In Portland: www.portlandpublicschools.com.
Sex Offenders: You can access the sex offender registry for your state online. For Oregon, the website is: www.sexoffenders.oregon.gov. On the Oregon site you can enter the address and it will bring up a map of all the registered sex offenders within a mile radius. Even if you're not concerned for your own safety, you have to consider that future buyers might not be into buying your house if you have a high concentration of offenders in the area or even just one living right around the corner.
Walkability: Especially living in a city many people will want to be able to walk to many things. You can get a good idea of what is within walking distance by entering an address into www.walkscore.com. You can also compare neighborhoods and see how they rate against the rest of the city.
House Potential: We don't feel like we can count on natural appreciation to boost our home value enough for us to be comfortable selling in five years. So while we hunted we looked for other ways that we could increase the value of our home.
Ability to Expand: Bedrooms, bathrooms and kitchens are huge price boosts. If you can add bedrooms or bathrooms or expand the size of any of these you could make a lot of money. We looked specifically for homes that had legal-height basement that could be finished to add a bedroom, a bonus room, and/or a bathroom. If there was space to add a bathroom elsewhere in the house, especially to create a master bath, that was a bonus. If there was room to take space from one room to add to a bathroom or the kitchen that was great, too. We also considered the ability to add space in attics, although adding a staircase can often take valuable space away on the main floor.
Ability to Improve: Again, kitchens and bathrooms are key. We looked for houses that needed some updates in these areas. If the updates were easy and inexpensive that was a bonus. We're looking for the biggest bang for our buck. Other updates, like removing wallpaper, painting, removing carpet, and restoring woodwork are great, too.
Something For Nothing: We specifically looked for houses with projects that we could do ourselves. The less you have to pay for an improvement, the more money you will make on it. If you have to hire someone to do the work you have to get a lot more money back in the sale to make sure you're getting your money's worth.
Neighborhood Support: Again we come back to the neighborhood. It is important if you're planning on increasing the value of a home that the neighborhood will support it. If you buy a home for $200,000 and put $100,000 worth of improvements into it, you have to be sure that someone will pay at least $300,000 for a house in your neighborhood if you want to get your money back. If the average home price in your area is still $200,000 when you go to sell, you might be in trouble. We took a good look at the average prices that homes were listed for and had recently sold for in every neighborhood we considered. If we found a home with a lot of potential updates but in a neighborhood where the average home price was no higher than the house we were looking at we moved on. Go to www.zillow.com to see current and recent homes for sale in any area.
If we were buying a house to live in for the rest of our lives we might not have considered many of the things above. But since we're planning on selling at some point, we have to think about not only what we want but what the average future buyer will want. Home ownership is a risk no matter how you plan it, but we're hoping to reduce our risk in any way we can.
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