Buying a property is a huge decision. Not just financially – buying a property is also a massive life decision that will greatly impact on your day to day lifestyle and your happiness. The property you buy for your home is going to dictate how close you are to work and friends, how comfortable you are when you relax in the evenings, and even what activities you can do in the space.
So if you are the kind of person who sometimes finds it difficult to decide on what pants to put on in the morning, then you’re going to potentially have an even more difficult time with this. As such then, it might be useful to try and take emotion out of the decision, and to make up your mind in a more objective and measured way. You can accomplish this by thinking the way that someone who works in the purchasing department of your business might – by creating a spreadsheet and using that to look at which properties technically represent the best investment and the best decision. Read on to learn how you can create just such a spreadsheet.
The basic idea behind a purchaser’s spreadsheet, is to create a pros and cons list. The only difference is that you’re going to make this list much more detailed and complicated than just a simple ‘pros and cons’ seeing as that kind of list won’t take into account weightings and will be a little overly simplistic.
Instead you are going to use a number of different sections which will be named ‘criteria’. These will be the kinds of criteria that you need to meet. For someone purchasing a new printer the criteria would include things like ‘price’, ‘speed’, ‘quality’ and ‘support’. For you they should include at least the following:
- Location (Locality to work/school/friends)
- Attractiveness of area
- Size (number of rooms)
- Access to transportation/local amenities
- Value of area
But you will probably have more that you want to include personally. Don’t worry if some overlap, or if some elaborate on others – the beauty of this system is that it won’t matter.
The next step is to score your property on each of these criteria. So if the house is very affordable, then it might score 10/10 for cost, but if it’s quite small it might only score a 3 for size. This way you can quickly compare lots of properties on multiple different factors and get a picture of the lay of the land and your options.
The reason that this isn’t just a pros and cons list though, is that we’re now going to weigh up each of those scores differently. So convert each of those criteria into a percentage. For instance, it may be that you value cost more than anything else – in which case you might make that worth 30% of the overall score. You had a 9/10 for that score, so you’re going to treat it as a 90% of 30%.
To make life easier, let’s make the overall score for your properties 100. So that would mean that the cost score would be 90% of 30, which in turn is of course is 27. Add all these scores up, and you are left with a score for each property that takes into account everything from the cost of the place you are thinking of buying, to the area, to the size – and all of those things will be weighted with regards to how important they are to you.
This is a great way to get a very accurate picture of which location is technically best. Nine times out of ten this will tell you what you already know and you can go ahead – but if you don’t feel it’s made the right decision then ask yourself which property you were secretly hoping was going to win. Once you know that, then you will know where your heart lies and that’s something you can take into account in a big way too.
Most of the time though this method will provide you with the right answer and guide your decision making well. It’s not a fool-proof process, but it’s good enough for the police when they invest millions of dollars into a helicopter, it should be good enough for you too.
Alden Parker, the author of this post, is a frequent blogger and a financial advisor at Benson mortgages, a company that provides creative solutions and quick funding to their lenders and borrowers. He has many years of experience in this field and likes to share his knowledge through his blog posts.