Location, location, location! This is what is most important. Look for homes in good school districts that will be a desirable neighborhood. Avoid homes that back up to major roads and loud nuisances (shopping centers, railroad tracks, highways- just to name a few). Try to get homes that are on the interior of the neighborhood and located in cul de sacs.
You will also want to buy it for about 60% of its value. This helps cover the costs of repairs that will be needed, keeping utilities on while it is vacant, fees for flipping the house, commissions to pay when selling it, among other fees that may come up. Depending on the condition of the home, you will have to adjust your margin based on the repairs you will need to do.
If you are looking at the home as an investment, then don’t spend much on upgrades. Pick small to medium upgrades and stay pretty standard with the customization. Pick items that the general population would enjoy – a gold column in the living room may not be appealing to the new buyer or renter.
If you are looking at the home as a forever home for your family, then go for the upgrades. Customize the home for quality for living. Make it something that you will enjoy for years to come!
When looking at an older home, you are able to do more research on the neighborhood and see how the homes have held their value. If you plan to resell the house one day, this will be important to you. If the house hasn’t been updated or doesn’t have everything you are quite looking for, will this be an investment in the end? Are you getting a good deal on the house? Will putting $20,000 worth of work in it gain you $80,000 in equity?
Looking at the new construction, you get you lay everything out exactly how you would like. You get to pick colors that you prefer, material that you would want, and the home will be move in ready. There is no question the home will have everything you are looking for. But are you buying at the height of the market for that neighborhood? Once homes start to resell, will they lose their value? Have there been any resales in the neighborhood yet and if so, how did they fare? These are questions you need to look at for new construction.
The answer to this question will all depend on what you are looking for in the long run. If you plan to live in the home for many years, new constriction may be the way to go. If you are not sure how long you may stay, your best bet may be to go with the older home where you can see the market trend of the neighborhood.