Purchasing residential real estate is an investment. This is true even when you plan to use the property as your dream home. As a result, it is wise to look at the transaction as an investment. When making an investment, it is important to review both the risks and benefits of the purchase. When it comes to purchasing residential real estate, three of the most common risks to assess include:
- Location. The old real estate adage "location, location, location" holds true for a reason. The location of the property will impact its value. Get information not only about the traffic on the street the property is located, but also on broader aspects of the neighborhood like the quality of the school district and amenities.
- Market. Knowing the market plays an important role when investing in property. This point was recently addressed in a publication by US News, noting that those purchasing residential property are wise to hire an agent that knows the market in the specific location where you plan to purchase property.
- Internal compass. Although you need to step back from your emotions and logically look at the property as an investment, it is important to take you feelings into account. This is especially true if you are considering a property for your home. Take your emotions into account when choosing the property, but keep them away from the negotiation table.
Accounting for these three risks while you navigate your search for the perfect home can help better ensure that your purchase is a wise one.