Are You Looking for a Home or an Investment?

Are You Looking for a Home or an Investment?

I recently worked with a lovely couple who were looking for a home in DC. They wanted an older home with charm and at least 3 bedroom and two baths. They didn’t mind if it needed updating, but wanted no major renovation projects. It should be near a metro, for resale purposes. And, most importantly, they wanted to be able to put a rental apartment in the basement.

We looked at homes for a while and of course, the longer we looked, the more their needs and desires crystallized. A yard became more important, so we added that to the mix. Perhaps they were willing to do a bit more than simple updating – so we looked at fixer-uppers as well.

We put in a few offers and lost out in some competitive situations. One house they walked away from because the home inspection revealed too many extensive issues. Finally, one day we looked at two similarly priced homes that my clients liked, but could not be more different.

House #1 was move-in ready. It was an updated, 3BR/2BA rowhouse in a good neighborhood, had a great layout and a spacious basement. It had off street parking, but absolutely no yard. And, it was near a metro!

House #2 was a detached home in a slightly better neighborhood and on a really pretty street. This home was very spacious with 4BR/2BA, an OK basement, a huge yard and a garage. But this home hadn’t been updated since the 60s. It needed everything. And, it was not near a metro.

My clients went back and forth for days. They had lots of questions about resale value and felt that House #1 was the better value. But House#2 had so many special and unique features that they liked. They didn’t know what to do – they were stuck. Finally, I said to my clients, “the house you choose will not just be an investment, it will be your home. You have to live there. You should love it. Choose the home that you will love coming home to.”

The next morning they called. They had chosen House #2. They just loved it – for tangible and intangible reasons. They felt like it would be worth all of the time and effort they would put in to it to make it their dream home. Hooray for them!

My advice to clients is to always consider resale value when buying a home, but not to the exclusion of other factors. It’s still your home, after all.