Saturday, November 18, 2006
How To Become Rich And Get Dumped
A very good reason to buy the worst house on the best street for your loved half.
No kidding! It shows that I'm a bachelor.
Most people buy residential real estate based purely on emotion, without ever really thinking rationally about why they are doing what they are doing. For example, I have a friend who lives in a suburban community distant three hours by car from Downtown Vancouver, where I live. As my pal also works in Downtown, he has to travel six hours each and every day of the working week - that's 30 hours per week just to come here to earn a living and go back home. That's an awful lot of driving. When I asked why he bought his home so far away, his answer was simple: that's where his mother-in-law lives, and the wife wanted to be close to her.
The trouble is, in that location the home is a tough sell and will appreciate in value slowly, if at all. Heck, I'm not even sure it's Canada .... Meanwhile, six hours a day on the road is enough to eat up a normal car every three years and run up a mountain of gas and maintenance bills. That real estate decision may make the wife happy, but it is hardly logical. The point is that when you are dealing with the single most expensive asset of your life (your house, that is ... not your wife), representing the bulk of most people's net worth, then emotion has to be relegated to the back seat.
The most valuable feature of real estate, by far, is where it is located. The old adage of ‘location, location, location' as being the three cardinal rules of housing is true today as it has ever been. Real estate is, afterall, an unmovable commodity and it is worth what it is worth mainly because of where it is at. Therefore, location is the very first thing to take note of, not the condition of the structure that sits on that apron of land. In ultimate analysis, whatever may be wrong with the house can always be fixed, rebuilt, repaired, restored or replaced. However, a bad or questionable location can never be changed - unless one buys the entire subsection of the city.
This is the reason why one should buy the worst house on the best street, and not the other way around.
In every city and town there are invariably neighbourhoods or areas that are ‘in demand', and they are in demand for a reason - either they sit on a lake or river frontage, command views of the city skyline, of a ravine or the ocean, or have peaceful, leafy streets. Some areas are close to schools or public transportation routes, or are unique in terms of topography, history or population variety. So the savvy Buyer will try to get into these areas whenever he can, and then will sleep well knowing that he has taken care already of the resale value of the home he has just finished purchasing.
When shopping for a home, it is always best to avoid houses that sit near major traffic thoroughfares because of reduced privacy and more traffic; or houses sited next to schools or retail stores, as they will always sell at a discount compared with the ones in the middle of a quiet residential block. And forget about buying anything that is near a police, ambulance or fire station, or a hospital or factory. Furthermore, it pays to avoid neighbourhoods that are in transition, since tree-filled areas will always and invariably be worth more than new, suburban streets with twigs planted along the boulevards.
But since what one buys will always reflect what one spends at any given time, to buy the worst house on the best street is the sure way to maximize capital gains at the time of resale, simply by fixing it up a little. It sure pays to live where everybody wants to live and make a little money in the process. And if you get dumped by your loved one in the meanwhile, look at it on the bright side - you can also enjoy your new neighbourhood in peace and tranquility.
Real Estate Chronicle