When shopping for a new home do you shop for a small home or a large home? There are pros and cons to each. When it comes to real estate, you should first remember the old adage, “location, location, location.” That is still a more important factor than size. But, if you are considering homes in essentially the same location, is the smaller or larger one the better investment? Which one will you give you a greater financial return?
At first, you might think, bigger is better, with roomier closets and more spacious kitchens, but probably not so when it comes to the return on your investment.
In twenty of the largest U.S. metro areas, smaller homes generally appreciate at a faster rate than larger homes. But, it might not actually be the home itself. The actual physical structure depreciates; it’s the land that rises in value. So when contemplating an investment, consider the location.
We have continued to see increased demand for homes in city centers. This could be for a number of reasons. High on the list of most home buyers or renters, especially those with children, are the quality of local schools and the sense of community.
Another is walkability. Seniors and younger people without children frequently seek locations in which one can easily walk to stores, parks, and other amenities. Unfortunately, no matter how appealing a home in the suburbs may be to these generations, it may not be feasible to live where owning a car is required to get around.
And the obvious is that bigger costs more. The upfront costs are typically more as are the upkeep, maintenance and utility costs.
The bottom line is that a smaller home tends to create a lower debt and can be easier to manage and the longer term may be easier to sell than a larger home. But we will continue to instill the message that whether you choose to buy big or small, in the end, it still comes down to location. If you have any questions on financing a home, down payment assistance like the Home in 5, Home Plus, or mortgage lending please don’t hesitate to contact our team.
The Certo Team 55 N. Arizona Place Suite #103 Chandler, AZ 85225 602-429-6789
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