At this time of year, and maybe especially this year, driving around to check out Christmas lights can be an entertaining pastime.
And what catches your eye as you navigate the streets of a neighbourhood?
The biggest, most beautiful display of lights, right?
Similarly, when you’re looking at houses in a neighbourhood or on a street, what catches your eye first?
The biggest, most beautiful house, right?
One of the unwritten rules that’s always considered when buying real estate is this: Don’t buy the biggest and best house on the block. The reason has everything to do with eventually (and inevitably) re-selling the house.
If it’s the best house on the block, it’s probably the most expensive. If the other houses on the block all cost less, then the appreciation value on the biggest house figures to be less. And, for the very reasons that come with that unwritten rule (“don’t buy the best…”), it could limit the number of buyers.
Of course, that’s just an “unwritten” rule, not a hard and fast one. If, on the other hand, you have a home worth $2 million, your neighbour’s is worth $1.5, and the market increases by 10 per cent, then in theory you will “gain” $200,000 in value compared to $150,000 for the neighbour.