Make sure your starter home has investment potential
Buying your first home is likely to be one of the highlights of your life. It’s a step forward in giving you and your family a secure future. However, for some people their first home is not just a personal asset, it’s a part of a well thought out plan to turn it into a long-term investment opportunity. If this is the way forward for you, here a few pointers to keep in mind before investing your money in a house:
A starter home is like a ‘filler’ habitat until individuals can move on to a bigger and better property. There are two ways to go about it – you can either: sell it quickly and move on, or you can keep it, rent it out and get a constant long-term income.
Remember though – rentals are heavily dependent on location. For example, buying a home near a university can be a brilliant investment because you can easily rent it out to students. But, if you’d prefer to rent your property to a young family, invest in a neighbourhood popular to that segment of the market.
Apart from the location, rental values are also dependent upon the positioning of the house in relation to other properties. A big house situated in amongst clusters of apartments is likely to fetch way less than a small corner home with spacious surroundings and an abundance of natural light. Also, keep in mind you need to ensure that the rental income you get is higher than your mortgage. According to propertyfinder.ae’s latest data, emerging communities in Dubai, such as Sports City or Silicon Oasis, offer yields of over 9 per cent.1
If you are going to stay in your starter home for a while, invest in home décor considering the number of years you plan to be there. If it’s for five or six years, you need not go overboard with things like a deluxe kitchen, lavish bathroom fittings or an expensive high-maintenance garden.
Room for growth
The number of years you stay in your starter home depends a lot on your family planning. Keep the option of growth open in case you decide to have children earlier than planned. Many couples decide to expand their family in a starter home if it appears more cost-effective than moving into a new one.
Better maintained homes fetch higher rental income. It doesn’t matter if you plan to stay in your starter home or not, but maintaining standards is of the utmost importance. You can seek professional services or do it yourself if you have the skills – and it’ll be significantly cheaper.
What’s fancy and lavish for you might be hideous for someone else! Do your research before designing your house, especially the bathroom and kitchen. Play it safe and go for tasteful, universal trends in order to appeal to the widest selection of buyers or tenants.
Sources: 1: Gulfconstructiononline.com