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By Albert Lowry
What’s the difference between a house and a home, and how do you make the best purchase choice in either case? Those seem like straightforward questions, but there’s a lot to take into consideration to make a smart decision.
First of all, a house is a property from which you expect to make money, and a home is where you live. There are some factors in common for choosing a good deal for either one of these but also some differences that you should be aware of.
In today’s market, for both houses and homes, it generally makes sense to avoid getting the biggest, most expensive dwelling you can. Buy only what you need, and you’ll have the opportunity to make improvements with the money you save. You can determine what would be right for a home size for yourself. In the case of buying houses for investment, the ideal size for a rental unit is 3 bedrooms and 2 baths. It’s what most renters want, so you have a better chance of charging a good monthly rental price and having high rates of occupancy.
Another factor that holds true for both houses and homes is the familiar real estate mantra of “location, location, location.” You can make more money from renting out a house in a desirable area. For the place you call home, you also want to be in a nice neighborhood where you enjoy living and your property retains its value.
That being said, don’t limit yourself to one area. There are good neighborhoods throughout most cities and towns, so it may be to your benefit to get out of your familiar zone and widen your circle to try to find some hidden gems.
When you’re out hunting for properties, one of the best suggestions I have for you is not to restrict yourself to drive-by shopping. A house or home may have little curb appeal, but be a real bargain for its appealing interior. You can always create curb appeal later with some sprucing up, so don’t let the initial let down of the exterior keep you from exploring further. Knowing that little trick will put you in line for some real bargains, plus you won’t be competing with others who passed up a bargain because they didn’t know this important tip.
Another common mistake people make when buying properties is to buy according to emotion rather than taking the time to do the necessary research. Judgement is distorted by emotions and that can lead to bad decisions. Instead, ask yourself whether the home you have your eye on will truly meet your long-term needs. And for a house, objectively determine its future profit potential and back that up with thorough research.
In both cases, you’ll want to consider the proximity of schools and shopping, whether it’s for your own quality of life, or for the house’s perceived value as a rental unit or as a resale. If promises have been made about future desirable development in the area, check for yourself that it really is a sure thing before paying a price that’s based on that expectation.
For any property you are considering purchasing, whether a house or a home, look for anything that has the potential to cost you a lot of money later on, even if it falls outside the scope of the professional inspection.
Now, suppose that you’ve found a property that you would like to buy. How can you get it for the price you want? I want to share with you some professional investor negotiating tips that have worked very well on a good number of deals I’ve made.
The first applies more to house purchases. To be a successful investor, it’s necessary to make a lot of offers. As a buyer, you always want to pay the price that you’ve determined to be a good value for what you’re getting. Plenty of sellers won’t see eye to eye with you, but there are others who will, and you’ll pay the right price.
There are the certain techniques that will help you achieve this. If a realtor has shown you a property you’re interested in, later try contacting the seller directly to ask some questions. Be personable and talk to him as a human being, not as an adversary. Ask him what the basis is for the price of the property. If you do a little research and find that it is not in line with comparable properties in the area, that can give you some leverage with the seller, especially if you present the facts in a reasonable and friendly manner.
If you are going to ask the seller for a lower price or for concessions, it’s a good idea to bring their expectations down with some finesse. One way to do this is to avoid showing interest in a property and point out its shortcomings in a way that allows the seller to save face and see your point of view.
You’ll find that if you perform your property search diligently, make rational judgements, submit a lot of offers, and negotiate effectively, you will pay the right price for either the home of your dreams or investment houses that have big profit potential for you.
Your partner in prosperity,
Dr. Albert Lowry