Buying into Real Estate with These 2 Quick Tips Will Maximize Return

When buying into real estate it can be beneficial to keep in mind the saying “You make your money when you buy, not when you sell.” 

To make the most out of your investment when buying into real estate, it’s important to consider both functional and investment aspects. Here are two key tips to keep in mind:

Holding period. When buying a home as your primary residence, give significant consideration to how many years before you plan to sell. Knowing this helps inform all decisions and can help you capitalize on the right opportunities.

Appreciation rates. Neighborhoods appreciate at different rates, so it’s important to analyze and compare them. When interest rates increase, record levels of overall market appreciation can quickly fade. By comparing rates, you can better determine which properties will appreciate the most over time.

For example, let’s say you’re trying to choose between two houses, one with gray countertops and the other with white. Both are listed for sale at $500,000, and you plan on living in the house for 5 years. If the neighborhood of the house on B Street has had a slightly better appreciation at 1% higher than the house on A Street, it may be worth considering buying the house on B Street. In five years, that house may be worth $25,000 more than the house on A Street.