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It is never too early to consider the multitude of factors that influence how much your house will fetch when you decide to put it on the market. In fact, it is wise to take stock when you are searching for a home that suits your needs. Although it seems premature, one day you or your heirs will be selling the property. A “bargain” now may turn into a nightmare if it is difficult to unload your property due to a lack of interest.
We examine the major considerations that affect resale value. In particular, we focus on New York City real estate. After all, items such as lot size and curb appeal may be on the radar of buyers; it is not a major factor for city dwellers. Of course, if you are searching for a home in one of the outer boroughs, this may come into play, depending on the neighborhood. We are focusing more on Manhattan and urban areas in the outer boroughs.
Location, location, location
It may be a cliché, but it is the most important issue relating to resale. However, there is a multitude of things to contemplate under this broad category. Nor is it a matter of merely buying in the most expensive neighborhood. For instance, there have been many neighborhoods in Brooklyn and Manhattan that have seen a revival over the last several years. Nonetheless, a smaller house in a more affluent area will fetch more than a large home in a more modest neighborhood.
There are some qualities that make a location more desirable. Foremost is the quality of the schools, making it a key consideration even if you do not plan to have children. There have been several studies tying the quality of schools to the price of homes in the neighborhood. For instance, Redfin, a national real estate brokerage firm, recently conducted a study that showed buyers paid an additional $50 per square foot for homes in top-rated school districts compared to those that are located in average-rated ones. The study is based on over 400,000 sales in about 1,000 school districts across 57 metropolitan markets.
Frequently, test scores are used as the major basis for the ranking. There is a wealth of information online as well as websites that crunch the numbers. For instance, schooldigger.com provide ratings on New York City school districts.
There are several other important criteria that make a particular location desirable. These include being on a quiet street (these exist in New York City), a sense of community, the ability to walk to destinations such shopping and schools, proximity to parks, and access to public transportation (apartments on First Avenue and York Ave are relative bargains since the subway is in Lexington, but this may change once the Second Avenue line is completed). A view may also be considered important.
The neighborhood’s zoning should be checked. Although it may not be an issue currently, it could down the road if certain businesses are allowed. This could create undesirable noise and even pollution.
Taking a tour of the inside
Once you have determined the right neighborhood, it is time to examine the home. Of course, it will have to meet your current needs and those that may arise over the next few years. It is also wise to contemplate which features will appeal to future buyers down the road.
Square footage is a consideration, but an open layout also weighs in. Still, previously owners liked the privacy of closed off spaces, showing that tastes evolve over time. However, it is usually an easy fix to create the desired outcome. Regarding bedrooms, although “more is better” is an accepted wisdom, that is not necessarily true if apartment hunting in NYC. The difference in price by going to a three bedroom from a two bedroom apartment is not nearly as significant as increasing from a one bedroom to two bedrooms. Three bedroom apartments are competing with single family homes.
There are amenities that will be attractive to future buyers that will likely stand the test of time. Aside from a spacious, open concept, storage space is important. Counter space and closets will also be looked upon favorably by future buyers. An updated kitchen is also a nice attraction, but we will discuss that under the Upgrades heading.
Upgrades: Not all are created equal
After making the purchase, you may very well decide to make alterations. There are certain remodeling jobs that will add more value than other ones. Kitchens and bathrooms have long been noted to pay for themselves regarding the ability to fetch a higher price when owners decide to resale. The updates do not need to be major overhauls. Simple things like replacing the caulk, updating the hardware on the cabinets, and replacing the faucets can make a difference.
There are other things you can do to increase the value of your home. A well-lit space (number 1 in a 2007 survey by HomeGain), including natural light, more efficient heating and air conditioning, and flooring are all items that can boost your home’s value, aside from creating open spaces,
This does not mean you should neglect routine maintenance. It is imperative to keep up with repairs. Little problems like a leak can turn into major ones. A well-maintained home will be an attractive sight for future buyers.
There are other things to consider, which may seem small but will matter to future buyers. You will need to look into the history of the apartment. For instance, if there has been mold, even if it has been remediated, it could turn off some buyers. If the apartment is a fifth-floor walk-up, that presents an inconvenience, especially to the elderly or those with little children.
Amenities such as a gym in the building and a doorman are nice features to advertise.
There is a host of factors to consider when purchasing an apartment. For instance, new construction may cost more, but will future the newness wear off when you decide to move? An agent can be of great assistance. After all, he or she does this for a living, while you will only buy a home a couple of times during your lifetime. A buyer’s agent may be in the best position to help since he/she is seeking to put you in the optimal home, while a seller’s agent is likely seeking to maximize price and his/her commission.