If you’re considering buying a house in Minnesota, you’ve probably seen or heard some variation of these three big real estate myths. Your parents, your coworkers, your friends and even your acquaintances have nodded their heads solemnly while relaying these popular myths about buying a house in Minnesota, and they believe the misinformation themselves because it’s been regarded as fact for decades!
However, times change, economies shift and the picture of the perfect, diverse stock portfolio rarely stays the same. Although some of these myths are to a degree accurate, markets change, buying patterns change and inventory available on the market changes.
Even though some of these myths were once accurate, real estate is an ever-evolving industry, and staying informed can make a huge difference when buying a house in Minnesota!
- Purchasing a foreclosed or bank-owned property in Minnesota is a smart bargain
In a market filled with numbers and prices higher than anything you’ve ever purchased previously, choosing a foreclosed or bank-owned property when buying a house in Minnesota seems like an attractive deal. However, you may need the money you just saved (and then some!) to pay for repairs, address the effects of property-neglect and even possible vandalization by the previous owner. Just like that, your savings are drained, and you may find yourself in a deeper financial hole than you were in before purchasing. It is worth noting that a foreclosure can still be an idea worth considering, however, we strongly recommend that you compare the value of homes in your area that share similar size and conditions.
- Fancy neighborhood= excellent investment, especially when you’re buying the worst/cheapest house in the neighborhood
Location is THE game-changer when it comes to real estate investment. However, just buying a house in Minnesota in the best neighborhood, even if it’s not a great home, doesn’t suddenly turn the home into a safe investment. At the end of the day, a sub-par property speaks for itself, and is actually commonly one of the last homes to appreciate in a nicer neighborhood. It’s also important to remember that significantly lower house-pricing, especially when compared to homes surrounding the property, can scare away buyers who are wary of red flags, as opposed to capturing the attention of those looking for a great deal. Instead of buying a house in Minnesota that’s in an affluent neighborhood but isn’t a great home on it’s own, we recommend adjusting your home-buying strategy. It’s generally a good idea to aim for a home in the bottom 20-40% price range of the priciest neighborhood at the top of your budget.
- Buying a house in Minnesota is not a smart investment, or, on the flip side, is a low-risk or even risk-free investment
A major motivator for those buying a house in Minnesota is the opportunity to invest. Even though real estate has been given a bad rap as an awful investment, some still consider it to be a risk-free option. However, neither of these ideas is entirely true. While purchasing a home in MN won’t grow at the same rate as your stocks, it does offer an important benefit: it’s an investment in which you can actually live. You also may need a mortgage to purchase, and this loan is accompanied by tax benefits and offers larger investment opportunities through leveraging your down-payment. All of these factors can make buying a house in Minnesota a great investment, however, it’s not inherently a risk-free one. It’s almost always safer than stocks, however, basic risks are still in play. Job loss, a major dip in the market, and increased risk for lower-income buyers pose potential obstacles for home buyers, and it’s vital to consider these factors when buying a home as an investment.
We hope that we were able to help clear up some of these misconceptions,, and we would love to discuss more real estate ideas and options. Contact The Antonov Group today!
