Is Purchasing Cheapest Home on Block a Wise Investment Strategy?

As the realty industry begins to heat up, we sometimes fail to remember what actually happened or affected in the past.  We go so busily in the house hunting process, in order to own the home of our dream. Sometimes, we even forget to see the old or traditional realty adage, i.e. location. Sometimes it is good to look back for a while and step towards future. Imagine about the plot you’re purchasing now and think of selling it after some years. Think from both positive aspects (like increase in price or high demand) and negative things (such as problems or issues that you may come across). If you take all these facts into account, you might go in the right direction and avoid making common mistakes that most of the people commit- building or purchasing the best homes on the block.

Since the realty market is tough, it is hard even for sellers or purchasers to make financial commitment. There is tight inventory competing in the industry for a smaller group of shoppers. In this challenging market, you need to know why you aren’t supposed to purchase the best homes on the block.

No Super Size

Couple of years back, at the top of the real estate business, owners used to buy a small fixer-upper and then expand and renovate it to get better value. But, they used to end up selling it in the worst market, as they weren’t having enough knowledge about this field. If the house wasn’t getting sold, they had to forcefully cut down the price, ultimately experiencing the big loss. They actually would have purchased the plot at high rate or when the market condition was pretty good enough and eventually sold it off in a declining market. However, this isn’t the only reason- the other side of the home was a flat or apartment. You’ll have to consider proximity of the house and apartment building next. Do not expand your home when it has been covered by properties, which are not equal in value.

Look at the Neighbourhood

If you look at today’s market condition, be it recession or bust, buying the best home on block is big ‘no’. From the investment point of view, purchasing the biggest homes on blocks is not a good strategy at all. The value of the houses in a neighbourhood are intertwined due to the comps, which play a big role in determining what to pay for and how to price a house. If your property is surrounded by other houses of noticeably lesser value, the price of your home also will be limited. Hence, it is better to avoid purchasing a home on a block with apartment building, parking garage or rented houses. If you are very confused or need some expert help, it is recommended to seek guidance from professionals like John D Wood Letting Agents or any other renowned real estate agents near your area.

If you want to invest at all, you can purchase worst properties on the best blocks. You can anyway enhance or upgrade the home, eventually getting more value. Since it is available on a great block, the chances that you’re getting maximum returns on your investment will be high. If you work properly, you can turn the worst property on block into the most expensive and valuable house.


Santosh is an international development specialist and author of several publications on socio economic development. Santosh is a regular contributor to online article sites on the topics of on line education, underserved peoples, scholarship and educational excellence.

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