Home Buying in 94043>Question Details

Bayareanew, Home Buyer in 94043

Which approach is better for appreciation?

Asked by Bayareanew, 94043 Tue Jan 11, 2011

The first approach :
buy 1 house in best area, big land,smaller house, best school, plan to remodel
Approach 2) Buy two houses, one house in nice area that can hold value(not best, but still good schools to live); Buy another rental in cheaper area, plan to remodel.

which way will likely to appreciate better in values?

Help the community by answering this question:


Sam Shueh’s answer
Neighborhood home price dropped the most will arise faster than other areas in an up swing cycle.
Many studies during any kind of economy in the pricey areas barely move up. Home prices are over valued in a declining market will not appreciate much as there is no room left. Regardless of the neighborhoods the difference is the time lagging phase. Normally when neighborhoods away from metropolitan area showed a steep up swing is the end of the boom. When good neighborhoods price drop that is the end of a recession.
Web Reference: http://sam.shueh.net/
0 votes Thank Flag Link Tue Apr 12, 2011
I'd go with option 2

that's the situation I'm in now. I personally like having 2 houses gives you more options

also as mentioned appreciation not guaranteed but rental income is pretty reliable
so you're covered for both cases if housing prices go down rents will probably go up.
1 vote Thank Flag Link Sat Apr 9, 2011
This is too broad of a question. Appreciation is not guaranteed for any home or any market. You should talk with a savvy experienced realtor in the areas in your scenarios and evaluate the trends in those markets for your style of homes. What is the trend for jobs in those areas? What are the projections? What are the demographics? There is way too much necessary to be able to even take an educated guess as to which approach would be best.

It seems to me like you still need to do a lot more due diligence.
1 vote Thank Flag Link Tue Jan 11, 2011
If you plan on staying a while and raising a family, I would choose to go with the situation that would offer the best quality of life for my family. If you are comfortable with quality of life scenario 2 is going to offer your family and you have a strong desire to become an investor or landlord than this may be the way to go. If you are familiar with the markets and values in the 2 scenarios. you should be able to speculate on which homes are most likely to improve more. Sounds like less headaches with scenario 1
1 vote Thank Flag Link Tue Jan 11, 2011
If I were you, and had kids, absolutely scenario 1. Reasons:
1. Smaller house on a big lot in best area: great potential to expand and bring it to the neighborhood average size and sell, although this requires work+determination+vision, not to mention extra $$$.
2. Your kids simultaneously benefit from best schools

If I had no kids, then perhaps I'd go with #2, just to hedge my bets and have higher liquidity.

Hope this helps.
0 votes Thank Flag Link Wed Mar 30, 2011
Professional code of ethics prevents us to answer these types of questions. Have your buyers agent assist you with additional facts to make a decision

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Tue Jan 11, 2011
Let me clarify: we will live more comfortably in scenario two. more headache with scenario 1. we know the market pretty well, either way, the properties will hold values as the areas are in high demand and will almost certain to appreciate. If we go with scenario 1, we can only afford an older and smaller house that required a lot of renovation. We can live much more comfortably , but the area is not as nice (in the sense, there is less style and beautiful views, the school is good, but not top-norch). If we go with scenario 2, we will need to move in a few years (5+), as with scenario 1, I do not mind living there forever.
0 votes Thank Flag Link Tue Jan 11, 2011
Buy whatever best suits your finances, wants, needs, lifestyle, etc., and don't worry too much about appreciation, as none of us can answer with accuracy as to where the market will head tomorrow or, down the road--what we all know is today.
0 votes Thank Flag Link Tue Jan 11, 2011
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