Purchasing a home not only involves a great deal of paperwork and time, it’s also a decision that is likely to be one of the largest investments you’ll make in your life. It makes sense that you’d hope to get a return on your investment. In real estate terms, this means that your home appreciates. Put into its simplest form, home appreciation is what happens when your home is worth more when you sell it later than it was when you originally purchased it.
How You Can Help Your Home Appreciate
To a certain extent, home appreciation is beyond any single person’s control. During a strong economic period, for example, population growth and inflation can help boost the value of most homes by about 3 to 4 percent each year. There are some things you can do to help your home appreciate though.
1. Buy a home you can afford
This might sound logical, but it can be tempting to purchase a home that you can’t really afford because you think it will appreciate enough over time to make it worth it. A good example of this is a home that’s in a neighborhood that is up-and-coming. You might think that if you pay a premium for the house now, you’ll be able to make all of it back — and more — later when you want to sell. This plan can be financially dangerous.
2. Talk to an appraiser before making improvements
There’s a general consensus that certain upgrades to a home pay for themselves over time and help a home appreciate. That typically tends to be good advice, but the reality can depend a great deal on your particular situation. An appraiser knows the general market and can advise you about making improvements. In some cases, a home will appreciate simply because of the neighborhood where it’s located.
3. Make a plan before you sell
Home appreciation seems like it would be a benefit to you as a homeowner. In reality, if your home is appreciating because of inflation or other factors beyond your control, it could mean that other homes in the area are as well. This could make it difficult for you to upgrade to a larger home at a price you can afford. One idea is to add a clause to your contract that states that the sale of the home you want to purchase is contingent on the sale of your old home.
At The Parker Group, we’re the experts when it comes to buying or selling in the Greenville area. Our personalized service, comprehensive solutions, and experienced agents combine to provide our clients with a focused real estate experience so you make the right investment. Contact us today or visit our Greenville office for more information.