Is age of house important? Do newer homes appreciate in value better than older homes?
I'm going to be buying my first house. I'm looking at several cities, since I'll be working in Modesto: Manteca, Tracy, Turlock, and others. One place that really intrigues me is downtown, Turlock. However, the houses are very old: 1920's. Is that too old of a house to buy for an investment? Is it better to buy a newer home or an older home? Or, does it matter? Is location more important than the age of the home? I probably won't live in this house for more than a few years, since it will be a starter home for me, so it is important that it goes up in value.
Renting & Real Estate - 6 Answers
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1 :
location location location With that out of the way, if I had two homes of equal size in comparable neighborhoods and I had a choice of a 1920's house or new construction, I'd go with the 20's if it was in good condition. Condition matters way more than age. Similarly, quality of construction matters too, and the 20's house would beat the modern house 9 times out of 10 there.
2 :
The truth is that if you compare a brand new home with the same model home that is a few years old you will find that the home that is a few years old sells for less than the new home. It often sells for for more than it did when it was new but the new homes have gone up in price by even more. If you buy an home that was built in the 1920's you will find they are in limited supply so that the people that want them will pay a very good price for them. You will also find that there is a constant flow of money going out to fix and update the home while you live there. I live in a nice neighborhood with the homes built in the late 1960's. I love it because of the trees, schools, floorplans, parks, easy commutes and dozens of other reasons. But the best bet in looking at investment is: What is the best neighborhood? Then a distant second is: What is the condition of the home in the 1920's? (and the condition of it's neighbors). I would buy the house you like best in the nieghborhood you like most. If it is the older house have some extra money for upkeep. If it is the new house- hope that the new houses keep going up- if the builders start reducing their prices more you will be stuck.
3 :
You may want to think twice if you're only going to live there "a few years." There is no certainty that homes - new or old - will rebound in the short term.
4 :
It depends on the town and the neighborhood. For instance a home built in 1920 in Southern Modesto (around Hatch) is not going to ever appreciate. But a home build in 1920 in the College District or Grecada area of Modesto is a hot commodity and will always be desirable. They newer homes in all of those citys have not been well built and have a high level of foreclosures. It would be hard to say if they will go the way of rentals or families will end up in them....you are rolling the dice. Tracy and Manteca have been depressed areas for years, this last market dive did not effect them much because they were low to begin with. Unless they fix their school systems they will never be desirable. If you want a newer house in Modesto make sure it is in either the Enochs High School district or the Sylvan school district. Both areas will remain desirable because the schools are top notch. I am not as familiar with Turlock schools, but unless the college or chicken company (I think it is Foster Farms) fails you should be OK buying there. The difference between a good and bad neighborhood there is immediately evident, there is not much in between. Let me know if you have any specific questions, I have access to lots of info.
5 :
Location of home is THE most important thing. My home is over 100 years old in a community with many older homes and a handful of McMansions, and the average home value is about $700000. With any home 20 years old or older, you need a detailed professional inspection. Check out the roof, plumbing, electrical, HVAC, all systems. What is age of furnace, appliances, hot water heater, breaker panel? When was home last updated. Any home ages, but unless you're buying a mobile home, over the long run they tend to appreciate in value. Right now we're in a housing slump, and some say not at the bottom yet. So for a short term investment, be careful. There is no guarantee the home will appreciate in value, and there is every liklihood that you will make some repairs and improvements during your ownership. The boom-boom years are gone and you are NOT guaranteed a profit in short-term ownership. So buy a home convenient to your work in an area you like. Check out the school system, because solid schools cause homes to hold or increase their value more than anything else. Location of home is THE most important thing. My home is over 100 years old in a community with many older homes and a handful of McMansions, and the average home value is about $700000. With any home 20 years old or older, you need a detailed professional inspection. Check out the roof, plumbing, electrical, HVAC, all systems. What is age of furnace, appliances, hot water heater, breaker panel? When was home last updated. Any home ages, but unless you're buying a mobile home, over the long run they tend to appreciate in value. Right now we're in a housing slump, and some say not at the bottom yet. So for a short term investment, be careful. There is no guarantee the home will appreciate in value, and there is every liklihood that you will make some repairs and improvements during your ownership. The boom-boom years are gone and you are NOT guaranteed a profit in short-term ownership. So buy a home convenient to your work in an area you like. Check out the school system, because solid schools cause homes to hold or increase their value more than anything else. Decide whether it makes sense for you to buy a home or to rent and save for a bigger downpayment for a home purchase in a few years. Fund your 401k at work. You need at least 3% down payment, and you need 20% down to avoid paying PMI. The better your credit and the bigger your down payment, the better mortgage terms you can get, which saves you tens of thousands of dollars over the life of the loan. Go with a fixed rate loan, no ARM unless you're truly a gambler.
6 :
Location location location. This is one of the main factors in appreciation. That is why a lot of the newer house built today have a homeowner's association. This association state certain things that will and will not be allowed, additional building codes to go along with the city codes. Most houses will appreciate in value after 3-4 years. If you plan to sell in 3-4 years make sure that you maintain the house in excellent condition. Make it the best house on the block. Do not over build, but keep up the regular maintanace, painting exterior and interior, landscaping. For additional value you might remodel the kitchen and bath, add sprinklers to the landscape. I hope that this has been of some use to you, good luck 'FIGHT ON"
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