How often have you been advised to avoid buying the biggest or most expensive Anaheim real estate or homes for sale in a neighborhood? Somehow, the assumption is the larger, more expensive home won’t appreciate as much due to the surrounding smaller, less expensive homes. Therefore, when it comes time to sell the larger home, you’ll receive less profit due to a lower appreciation rate. If you really think about this concept, it doesn’t make sense.
Let’s say the smaller home appreciates at a rate of 6% per year, and the bigger home appreciates at a rate of only 2%. With the passing of time, the smaller home would have a higher resale price than the larger home-which of course wouldn’t happen. Implementing the rules of compound interest, we find this assumption to be untrue, just like the claim the nicest communities always appreciate faster.
You would have a difficult time locating a scenario where a smaller property had a higher resale value than a larger property in the same area. If you’re contemplating the purchase of a larger home surrounded by smaller neighboring homes, your decision should be based on whether the home suits your needs, objectives, and is priced correctly relative to the smaller homes. If you have the opportunity to pick up the property at a bargain price for not much more than a smaller home, it may be a great deal. But if the market price is unreasonably high, you might want to keep looking.
The next time you come across the largest home in a neighborhood, spend some time researching to see if it’s a good buy. You might be surprised at what you discover.
It’s also important to research the size and features of the bigger home and compare them to your object’s and future goals. If you have lots of children or plan on setting up a home office or just want to live comfortably, the biggest home in a community of smaller homes may be your best value for the money.
You should also learn to be creative. Just because you don’t need to utilize all the extra space in a larger home doesn’t mean you can’t put it to good use. Could you use an area to paint your art, set up the home library, or create crafts? What about the option of renting out one or two rooms for extra money or changing a section of the home into a mother-in-law a suite?
As you view the largest homes in a community of smaller homes, evaluate each one for income potential and affordability.
