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Mary P, Other/Just Looking in Florida Center, Orla...

Return on Investment

Asked by Mary P, Florida Center, Orlando, FL Wed Feb 20, 2013

We are looking at a 3400 Sft .2 acre brand new home vs 3400 sft .42 acre 2002 home in the Ballantyne area. The new home is about 20 grand higher for all the upgrades. Which one would yeild better return lets say 10-15 years from now, since land value appreciates and home value depreciates. Thank you.

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Good afternoon, Mary:
If you are making this a personal residence, then ROI should not matter as much, since Ballantyne is a desirable area and the chance for appreciation should be greater here than some other Charlotte area locations you might consider. You will be unlikely to see a disproportionate increase in appreciation between the 2002 and 2013 properties. Generally, the value of a 0.2 and 0.42 acre parcel will be modest, especially if the value is based on a finished lot and not on raw acreage (which in Ballantyne, is probably the case). To do a true ROI comparison, you would have to make assumptions about rental rates and the cost and timing of repairs, appreciation and increase in rental rates. The price you pay for the 2002 home and its current market value will make the greatest difference in overall ROI. IF you can buy it at a price that factors in the future repairs, it would probably be a better deal. I'd contact an appraiser to evaluate if it is a serious investment where ROI is critical. If you appreciate an answer, please give thumbs up. For the most helpful answer, please say thanks with a best answer click.
1 vote Thank Flag Link Wed Feb 20, 2013
Here is what you have to take into consideration, you say the new home is 20 grand higher for upgrades. The other home was built in 2002, what starts going wrong with homes after 10 to 15 years. The AC, the Waterheather, the roof, the flooring, the appliances and so on. If you take all that into consideration you are probably going to have to put the 20,000 back into the older home anyway. It really depends on if some of these items have been repaired or everything is original. It is hard to say without seeing both homes. If you need any more help feel free to contact me.
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0 votes Thank Flag Link Wed Feb 20, 2013
Hi Mary!

If you don't have a realtor representing you, email me directly and I'll help guide you through the process and valuation as far as appreciation/depreciation goes.

Hope to help!
0 votes Thank Flag Link Wed Feb 20, 2013
#1 Which house do you like better?

#2 Is one location more prefable than the other? i.e. schools, commute, shopping

#3 if you're financing, consider the extra 20K may only cost you about $100 more/month in a mortgage payment, depending on your interest rate, credit worthiness, etc.

#4 Who is the builder of the new home? What is their reputation? Are their other comparable developments in the area that they have built in and how are home prices doing there?

There are more things to consider, but without knowing the total picture, these are a few items I would think about.

If you have any specific questions, feel free to contact me anytime and good luck!
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0 votes Thank Flag Link Wed Feb 20, 2013
Very difficult question to answer but on the face of it I would look harder into the the 2002 home.

If you need us to look further into this for you please contact us

Giles Barker
Barker Group
0 votes Thank Flag Link Wed Feb 20, 2013
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