To invest or not to invest, that is the question. Buying a home is exciting, however, it can be a daunting task if you don’t know where to begin! As a Chicago Real Estate Agent, I work with a lot of first time home buyers. Thinking about buying a home, but don’t know where to start? I am going to write for you a few tips for investing in a HOME in Chicago and in the next few posts my colleagues at theCHICAGOchic will be writing about rental property investment in this wonderful city, where Real Estate is surely one of the most stable and most rewarding.
Here are my first 5 tips to get you started:
1. Plan early and start by talking to a lender:
If you are not purchasing your home in cash – this should be your first step. Many people are confused with the lending process but don’t worry, your Realtor is trained to explain to you how the lending process works and most likely knows several fantastic mortgage lenders who can work with you, take a look at your finances and figure out your price range. In many cases, buying a property in the Chicago market is actually less expensive per month than renting. It is important to secure a pre-approval letter from your lender so that you are equipped to make an offer if the perfect house comes along!
There are so many elements that make up one’s dream home – but it is important to PRIORITIZE! Most buyers end up with 80-90% of what they want, so it is important to separate the “nice to haves” from the “deal-breakers”. For example, in some cases, you can think that it “would be nice” to have granite countertops in your kitchen, but an open kitchen is a MUST . So make sure you pick your priorities and cut out time on setting your heart on the small details that can always been easily corrected. You can always change your countertops but it would be too expensive and time consuming to change your kitchen into an open style from a closed kitchen. Share your thoughts with your agent – he/she can help guide you on how your budget stacks up with your wish list in the local market.
3. Keep an Open Mind
Your agent will most likely begin by sending you properties to check out online that match your criteria. Once you find a few that look appealing it is then very important to make time in your schedule to start touring! It could be quite hectic and tiring after a while but don’t lose hope- you WILL find something that you love, eventually and it will all be worth it! One thing to note: properties often look different in person than they do online and (much like dating!) more often than not, your wants and needs will have a tendancy to evolve over time – so keep an open mind and don’t allow yourself to stress over little things that can be changed without changing the integrity of the structure (of the apartment/house).
4.1 You are NOT buying the Furniture
Of course a home looks more appealing when it is staged to the nines, but remember – the furniture is not included! Try to focus on the factors that are more difficult or impossible to change. Keep in mind the following:
* Square footage
* Layout & flow
* Outdoor space.
* Also, beware of trendy finishes that might look dated when you go to sell. In another post, I will write about the above points in detail.
4.2 Learn to ignore BAD décor!
Its easy to forget – but trust me – paint can be changed, floors can be stained and moldings can be installed. When you purchase a home, it is for the long term and you can often get a much better deal on a place that needs a little TLC – even when costs of renovation are factored in. Plus, a little work means that your home can be tailored just to your taste.
5. Think Long-Term(ish)
Where are you going to be in 5 years? Try to take into account not just your current needs, but those that might arise in the future (roommates? kids? job transfer?). Notes to take: In order for property value to appreciate, most people should plan to hold on to a unit for 5 – 7 years. If you are not sure what kind of space you may need in the future, check with the condo association if they allow you to rent out your unit and so forth. Rents have been steadily rising in Chicago, so best case scenario – you might be able to make a profit on rental revenue – making you a smart investor!
Nikki Hertzberg is a licensed Real Estate Agent. If you have any questions, write to firstname.lastname@example.org