Your top priority as a first time buyer is to find a place to call ‘home’, however you should not ignore the long-term investment potential of your property. Eventually, you may need an ‘exit strategy’ if you are forced to move or choose to upgrade to another property.
While there are several factors that will affect the resale potential of your new home, your proximity to transportation such as highways and transit is one of the most significant influences on real estate values. And with billions being spent across Canada on infrastructure improvements such as mass transit expansion and new bridges, it’s worth noting.
“Proximity of real estate to mass transit results in higher real estate price increases than homes distant to it,” says Gregory Klump, chief economist of the Canadian Real Estate Association.
Research conducted by the Real Estate Investment Network reveals real estate values increase as much as 20% for properties located within 500 metres of stations on new transit lines. However, REIN notes that there are some negative affects such as noise, increased traffic and vandalism for properties located in the immediate vicinity of some stations.
“Distance is now measured in minutes, not kilometres,” says Don Campbell, president of REIN. “As people increasingly factor commuting times into their buying decisions, proximity to transit lines could add even more of a premium to home values.”
But proximity to transportation is but one consideration first time home buyers should make. The following are 12 key questions to ask to assess the longer-term resale and investment potential of a prospective home:
- Is the area’s average income increasing faster than provincial average?
- Is the area’s population growing faster than the provincial average?
- Is the area creating jobs faster than the provincial average?
- Does the area have more than one major employer?
- Is the real estate booming in the surrounding region more than where you’re looking?
- Will the property value benefit from a major new development nearby?
- Has the local and provincial political leadership created a growth atmosphere?
- Is the region’s Economic Development Office helpful and pro-active?
- Is the neighbourhood located in an area of renewal or gentrification?
- Is there a major transportation improvement occurring nearby?
- Is the area attractive to Baby Boomers?
- Will any short-term challenges (such as negative publicity, layoffs) disappear?
Source: Real Estate Investment Network
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