If you’re looking at buying a home in Houston, whether this is going to be a primary residence for you and your family or a rental property to help you generate income, much of your success will depend on your ability to set and follow high-level priorities. From the outset of your journey, you should have a good understanding of what you’re looking for in a property, and you should subjectively rate which of those qualities are more important than the others.
In most cases, the “perfect” property doesn’t exist. You’ll end up having to make some sacrifices and some compromises to find a good property that works for you. The clearer your priorities are, and the more you think them through, the more efficiently you’ll make your final decision.
Priorities to Consider
These are some of the most important priorities to consider:
- Neighborhood/location. “Location, location, location” is a real estate cliché that dates back as far as the 1920s, but it remains relevant for property buyers today. There are many ways you can change and improve a given property, but you’ll never be able to change where it’s located. Your choice in neighborhood and location should be one of your highest priorities, accordingly.
- Structural integrity. You’ll also need to consider the structural integrity and core systems of the house you’re examining. Systems like electrical wiring and plumbing can be replaced, but not without time-intensive and cost-intensive processes.
- Price point. Another major priority is your price point. Are you willing to extend your budget to get an otherwise “perfect” property? Or do you have a hard limit that can’t be crossed?
- Cash flow (rental properties only). If you’re considering purchasing a property for rental purposes, you’ll need to think about the potential cash flow it can generate. How much rent can you collect, compared to the total expenses of the property? Ideal price-to-rent ratios vary by city; in Houston, the average ratio is 14.67, meaning properties sell for about 14.67 times the annual rent. The more favorable this ratio is, the more attractive the property.
- Bedrooms/bathrooms. You might also strongly prefer a property that meets a minimum threshold in terms of number of bedrooms and number of bathrooms. You can technically add space to your home later, but these numbers tend to remain stagnant.
- Move-in condition. If you’re eager to move in, you may want to purchase a home that’s already move-in ready, with no need for important maintenance or repairs.
- Yard availability. Some homes have more ample yard space than others. This may be important if you have kids, pets, or if you love the idea of spending time outdoors.
- Parking availability. For both primary residences and rental properties, parking availability is a major point of consideration. Is there a garage, or is there ample parking room available on the street?
You may also want to consider these priorities, though they tend to be less important:
- Kitchen/bathroom quality. Kitchen and bathroom remodels can be time consuming and expensive, so you may prefer these rooms to be high quality from the start.
- Age and style of the home. How old is the home, and is it built in the style you subjectively prefer?
- Seller disposition. Is this seller eager to offload their home, or are they going to put up a tough negotiation?
How to Determine Your Highest Priorities
So among these priorities, which should be the most important?
Consider the following:
- Hard financial limitations. One of your biggest limitations will be your budget. If you have a fixed amount of money to spend each month, or if you have a poor credit score and you’re concerned about your ability to get financing, you’re obviously going to be limited in the types of properties you buy. It’s not a good idea to overextend yourself financially to buy a perfect property, so pricing should become one of your biggest priorities if you’re in a tight spot.
- Personal differences. If you’re buying property with someone else (i.e., a spouse or business partner), you may have personal differences relating to your individual personal priorities. For example, you may strongly prefer a house with a big yard, but your spouse may be ambivalent to yard space. Take the time to make separate lists of your personal priorities, then compare those lists. Work together to create a ranking system that works well for both of you.
- Time horizon. You should also consider your investment time horizon, and how long you plan to spend in this house (if you’re living there). If you plan to stay in this house for 30 years, you’ll need to be much more discerning about location and structural priorities, with more flexibility on elements that can be easily changed. If you know you’re going to move in the next few years, your decision won’t be as impactful.
- Time and effort variables. Some people are more willing to invest time and effort into a property than others. Consider how much free time you have to manage the issues that might arise with this property. For example, if you don’t mind conducting little fixes yourself and sourcing potential contractors, the age of the property will mean very little to you. If you want to do as little as possible after buying this property, you’ll want something newer.
- Available options (and possible conflicts). Finally, consider the options that are available in the Houston area, and the potential conflicts this could have with your priority system. For example, many homes in Texas don’t have basements, so if a finished basement is an important priority to you, you may need to reconsider buying a home in the Texas area—or else reset your expectations.
Buying a home in Houston can be challenging, even if you know what you want. That’s why it’s valuable to work with an agent who can help you find your ideal property. Contact Green Residential today to learn more about our services, and how we can help you find the best home!