Houses that SELL!
Clearly, everyone wants to know what people like to buy — this tells us what to SELL! Anytime there is a commodity or brand to sell, knowing what consumers are looking for will get your inventory sold faster. This is true in most business and also in that of real estate. Whether it be flipping houses or holding real estate to rent long term, if you know what consumers are buying, you have a better chance of making a profit.
The largest market for home purchase according to Inman News is first-time home buyers. This tells me that if I am going to be successful selling houses, I need to be buying the houses that the majority of the market is looking for, right? So, if most consumers are buying homes as their first purchase, this would probably lead you to believe that they are younger families with modest incomes. Just by having this information alone it can be easy to determine a range with which you should be concentrating your research.
In my experience, any house can be a good investment if bought for the right price, but this is not the norm — being able to consistently locate and acquire properties that fit the majority of sales in that market is what you should be trying to do. In 2005, the median home price in the U.S. was about 213,000; that means half of all the homes sold for under that price. Also, the average home size was about 2200 square feet nationally. Given this information, it is reasonable to believe that if half the population was buying homes under 213,000 then I should be buying them under that price too!
Don’t bite off more than you can chew — what I mean is, not to buy more house than you need. This is the same mentality that the first-time home buyers are doing, so you need to do the same thing when buying the houses you will be selling to them! The average size home that I like to buy are somewhere between 1500-2000 square feet and have at least 1 garage. Most families have at least 1 car and prefer to be able to use a garage for vehicle cover or storage, this always seems to be the case. Also, you should be looking for a 3 bedroom house due to the average family size in the U.S. being approximately 2.6 people per home average and always try to have 2 or more bathrooms.
There are many things that can be fixed on a investment, but having to add a bedroom or bathroom or even putting up a carport will hurt your bottom line and it is best to stick with what the market is looking for, unless of course the home is such a deal that you just have to buy it.