We hear all the time that buying the cheapest house on the block is a bad idea. “It won’t appeal to buyers when you’re ready to sell,” real estate agents will tell you. But depending on your priorities and financial situation, it can pay to spend less than you can afford.
There are no “secrets” when it comes to homebuying. But unless you’re super wealthy and have millions in the bank, buying the cheapest house on the best block (in the best neighborhood) is a smart decision. Most buyers avoid this, but when you think differently from everyone else, you can get significantly higher returns.
I once made the mistake of buying the most expensive house on the block because I thought it’d help me break resale records. But nope — that didn’t happen. My property value went down due to the surrounding houses that sold for much cheaper than they should have. And because the pool of buyers looking for the most expensive houses is extremely small, I also had a hard time selling.
So I took a major hit and lost a lot of money. (Granted, I started my career in real estate at a young age, so I had a lot of learning to do. Luckily, my poor decisions taught me so much that I reached millionaire status at 26.)
Continue to read on: CNBC