There was a time when the purchase of a home was solely for living purposes. Today, however, many people are considering the investment side of it just as much, if not even more so. With the resale market picking up over the past couple of weeks it can be difficult to figure out what makes a good investment and what does not. Here’re a few tips.
First off, location. The Realtor you’re working with — ideally one who comes highly recommended by a trust worthy friend even after the sale — should be able to educate on the quality of your location. While the GTA is hot in general, you’d be wrong to assume that every neighborhood is on a level playing field. Location is first and foremost when it comes to addressing the resale value of the house or condo you’re interested in. Influencing factors might include the quality of the neighbouring community, proximity to various items both positive and negative, and long-term community plans.
Then there is size. There are a few general rules to follow, applicable to just about all neighbourhoods in the GTA, outside of downtown Toronto (where the rules can change). If you’re looking at four bedrooms, you should also go for a double garage. If you’re looking at three bedrooms, you should avoid a double garage. You get what you pay for, whether it’s an extra bedroom or garage space. However, demographically, if a family is considering three bedrooms they likely need only one garage space. Likewise, a family needing four bedrooms will require or at least prefer two garage spaces. There’s also more than just some merit in the “worst house on the street” theory.
There are also certain rules that result from the very structure of Toronto’s MLS system. If you’re looking at a home that’s just under 2,000 sq. ft. (say 1,965 sq. ft.) you’d do better to go for something less expensive closer to 1,700 sq. ft., or slightly more expensive to push you over the 2,000 sq. ft. mark. Two-thousand sq. ft. is a benchmark figure in the MLS searches and places you in a different bracket/psychological price range. Similar benchmarks exist for 2,500 sq. ft., 3,000 sq. ft. increasing number of bathrooms, a separate entrance, segregated family room, and of course a finished basement.
Resale. In terms of paying extra for your resale home based on upgrades, there are two main areas where the value in the upgrades can be recaptured best, thus worth most: Kitchen and bathrooms. In all honesty, when a family purchases a home it is, more often than not, the lady of the house who makes the final decision — and the kitchen (in terms of class) and bathrooms (in terms of cleanliness) are what catch her eye! Granite counter tops, marble flooring, expensive showers, upgraded cabinetry all attract a good return on your investment. Having said that, you do not want to blow a large wad of cash on upgrades just for the sake of selling. It’s important to discuss such things with your real estate professional.
When looking for a home, there are good things to pay for and bad things. These are only a few of the general rules! For more information feel free to contact me at amitp@rogers.com. Every home is built with wood, bricks, cement and drywall, but what’s contained within those walls, and the community outside, determines a good purchase from a great one. Happy Hunting!
– Amit is a Realtor/Developer with Re/Max. amitp@rogers.com
