Whether you’re buying your first house to live in or purchasing real estate as an investment opportunity, acquiring a home or rental property can be an exciting process. However, it’s also important to make sure that what you’re getting is what you need. Below are several things to keep in mind as you look at your options when buying real estate.
What are you looking for? Do you want a starter home to get you on the real estate ladder? Are you looking for an investment property? Do you want a place you can raise your kids? Are you hoping this will be your forever home, or at least the place that you’ll live for the foreseeable future? Do you want to throw elegant dinner parties, or do you want to be the place where all the neighborhood kids congregate? Identifying your goals as concretely as possible will help you find the place that’s just right for you.
Your Tax Benefits
Buying a home for yourself or as a rental property can bring tax benefits, and you should fully understand what those will be. You can look forward to a mortgage interest deduction. If you’re buying a place to turn into a vacation rental or another type of rental, there may be additional perks as well from the IRS. You can review a guide that will help you better understand what is available to you as a real estate investor. You can also learn more about tax advantages, including the top deductions for a rental property. The last thing you want is any unpleasant tax-related surprises or to miss out on money you could claim, so be sure to get all the information you can on tax benefits.
There are a few smart strategies you can employ while you’re shopping around. At best, they can result in a significantly better deal for you; at worst, they can’t hurt. When you’re looking at a home, even if it’s your dream house, don’t gush and make your eagerness apparent. You’ll be in a better position to negotiate if your enthusiasm is muted. Some professionals might suggest that you make an offer earlier in the week rather than later since there tends to be more competition on weekends when families are freer to get out and visit open houses. Aim at houses that are well within your budget to give you more negotiating power and to reduce financial stress once closing has occurred.
If you’ve fallen in love with a place, it can be easy to lose track of the fact that location will be important to you even if it seems irrelevant in the first flush of infatuation. You can always remodel your home but you cannot change its physical address. Think not just about your commute and where the kids will go to school but whether you’re on a main road, if it seems like it will be noisy and what the neighbors are like. All these might seem like factors you can compromise on when you’ve found a place you love, but they can wear you down over time. It’s worth taking these things into account if you’re buying an investment property as well. You want to attract tenants who will find your place desirable.
How much work does the place need? Older homes can be charming, but they may also command a lot of your time and money. On the other hand, new builds may not always be as solidly constructed. Keep in mind that ugly walls and carpet can be easily and cheaply changed. Focus on the larger issues, such as whether you’ll need to replace floors, redo the kitchen and bathroom, or address other major problems.