Conventional wisdom says to buy the worst house on the best street. Let's ponder that philosophy for a moment...
In theory, it sounds like a good plan. Move into the least expensive home in a really high end neighborhood and allow your neighbors to "pull up" the value of your home. However, in this little corner of Pennsylvania, the worst or smallest home on the street is having issues even selling in today's market
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In reality, buying the worst home on the best street may not necessarily work out that well. Your best bet is to move into a nice home in a nice neighborhood and live comfortably within or below your means.
The "worst" house that you buy at a discount will have to be eventually sold at a similar discount unless you put in the time and expense to bring it on par with the neighboring homes. And the more expensive the neighborhood, the more cost involved to bring your house up to standard.
Resale aside, there is another factor that needs to be seriously considered. Living in an expensive neighborhood can lead to an expensive lifestyle. Many homeowners cannot help but get drawn into the competition of "keeping up with the Joneses." If your neighbors have lawn services, custom decorators, cleaning ladies, new cars, and in-ground pools, you may feel pressure to spend beyond your means to fit in and save face with them.
Socially, your children will want what their friends have. If the neighbors' kids go to an expensive private school, you may be inclined to send your children also. As their neighborhood friends get new clothes, new toys, all the latest technology gadgets, expensive vacations, and deluxe birthday parties, you will feel pressure to do the same for your children.
In his new book Stop Acting Rich, Dr. Thomas Stanley (author of The Millionaire Mind and The Millionaire Next Door) studies the wealth accumulated by families compared to the value of the homes they live in. Interestingly, as the value of the home goes up, so does the percentage of people who are living beyond their means and accumulating virtually no wealth. They are spending too much money on material possessions and luxuries they really cannot afford.
There is nothing wrong with striving to own a beautiful home. It is a good thing to move to a safer neighborhood or a better school district. It is also okay to get a bigger home for your growing family, a yard for the dog, a patio for entertaining. Home is the all-important place where the family's heart is, traditions are made, and memories are cherished.
You should always love your home and take pride in it. But temper your desire to impress your friends and move to a home that will provide long-term stability and roots for your family. Buying into a neighborhood you really cannot afford may only take you to the poor house.
~Lisa
Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.
Should You Buy The Worst Home On The Best Street??? Copyright © 2010, The Scott Loper Team, All rights reserved.
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The Scott Loper Team
Scott Loper - Associate Broker
Lisa Loper - Sales Associate
Gina Wherry - Sales Associate
RE/MAX Realty Group
439 Main Street
Harleysville, PA 19438
Ph: 215-256-1200 x-213
There are some advantages to buying a home like this. Your first thought should be can my family live in this home and be happy. Most buyers are buying the home to live in, not becasue it is an investment property.
Wow...interesting and thought provoking post! I don't know that i have thought of it this way....I overheard a former loan officer talking the other day...she is now going to cosmetology school...she said that as she did more expensive loans the more she wanted that lifestyle and felt her self changing and she didnt' like that change....she is much happier and feels more grounded now!!!
You are so wise. Many times the worst house on the street is the worst house for reasons that cannot easily be changed. I tell people to jump on houses that are a bit below average and can easily be brought up to par. That's where they will gain value. Buying a pig in a poke usually means that down the road you will be selling one as well . . .