July 8, 2010, 6:00 am

Real Estate Considerations– What’s Important?

by: MD    Category: Properties
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We’ve gone over the negatives of real estate investments, common real estate misconceptions, and the positives of real estate. What’s next? Now we can assume that you’ve decided that purchasing a piece of real estate is the ideal option for you at this very time in your life. What do you do next? In my opinion I feel that the next step is to look at some of the important factors when it comes to purchasing real estate.

Now that you’ve decided to invest in real estate (I’ll be referring to your primary residence in this post, not investment property) you need to look into a few important factors:

Location.

Real estate is 100% all about location. Let’s be honest, the cost of my downtown condo could probably get me a mansion out in the northern part of Ontario– but why would I live there? I’m not trying to raise a family. Real estate prices are directly related to the location. The question that you need to address is: where do I want to live?

Proximity to work.

If you commute to work you’ll likely want to find a place that’s relatively close (unlike some crazy people that travel 1.2 hours to work, wink wink) to your destination of work. One of the most important factors is to consider how long it will take you to get to your job from your new place.

Are you willing to travel a little longer for a more spacious home? Do you prefer to live in a more compact unit that is closer to work?

Neighbourhood– what are you looking for?

What’s in the neighborhood? Do you want to be located near a elementary school for your young children? Or do you want to live closer to a high school/college for your older kids?

Another aspect of the neighbourhood that you need to consider is the demographics. You certainly wouldn’t want to raise a family in a downtown condo or in a more dangerous side of town. Would you like to live in a community with a similar culture to yours or would you prefer a more diverse community?

How much work are you willing to put in?

I have friends that have picked up properties for low prices in hopes of making some serious upgrades. Some people enjoy fixing up their property. Others would like to purchase a property that is relatively low maintenance and already has major upgrades completed. Do you want the challenge of upgrading your own home or do you want the work to already be completed?

Property taxes.

You could save up some decent money with your partner to make a down payment on an expensive piece of real estate. However, will you be able to pay the property taxes? Property taxes can be a silent killer that eats away at your income before you even know it. This is why it’s important to always consider the property taxes in the specific area that you plan on moving to.

How steady is your income?

Yes I know that this isn’t directly related to your potential piece of real estate. It is very important when it comes to determining how you’ll pay your new found mortgage payments. I don’t want to be a downer, but a high salary today doesn’t necessarily mean that you’ll be earning a high salary down the road. You need to make a realistic assessment of the stability of your income before you decide to take on a mortgage.

Where do you guys stand as it relates to some of the questions thrown out in this post?

image source: splorp

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Comments

Location: not ideal for when my kids are small, but once they are teenagers and older the location is perfect.

Proximity to work: 5 min drive, 15min bike ride, 40min walk to work.

Our very local community has only one other family with kids in similar age range, but we are very close to the arena, the major municipal pool, the school and so on.

Our house was ready to be moved in. There was no absolutely necessary work, just things we’d like to do. We’re slowly doing them.

Our property taxes are high, but with our combined salaries we can afford it and still have some money to save.

As much as a job can be stable, both my wife and I are in stable positions with stable companies earning a decent salary.

That’s really good to hear Phil. How often do you ride your bike/walk to work? I can imagine the exercise being the perfect transportation solution on a summer morning.

[…] Real Estate Considerations– What’s Important? @ The Financial Blogger […]

Great post- I’ve been looking to buy a home recently (much to the chagrin of my readers =P ), and I should get my partner to read your post. =) Location, location, location! We’ve been looking around for houses with basement suites (mortgage helpers) but he doesn’t seem to understand that people don’t want to rent basement suites in the suburbs =) (or won’t pay as much for them as they would in the city).

[…] The Financial Blogger had a couple things to consider when buying real estate. Property is, of course, always number one. What else? […]

by: The Financial Blogger | July 12th, 2010 (7:45 pm)

@ Young and Thrifty,
I would not rent my basement, this is where I have my home theatre… I just need to make more money I guess and avoid renting a part of my house…