Uniqueness: each one of us has a personality with our needs and different views. Similarly, as with the human personality also real estate has its own uniqueness. Which means there are no two identical objects. The same can be attributed to the neighborhood – a place where the real estate is located. Having regard to the real estate and neighborhood diversity, a person is burdened with decision-making process on how to choose a home: should I buy it, rent it and in which neighborhood?
Before making a decision a person needs to evaluate certain criteria in regards to choosing a home and neighborhood. Therefore Urban Treetops has developed a six-step process that will help to make the decision process more transparent.
1. BUDGET
Although nowadays the lifestyle of buyers and tenants are changing, for example dividing monthly rental payment by the number of roommates which is called
“co-living”,
most of the transactions and contractual obligations are still carried out by individual buyer or tenant. The household budget is one of the major factors that restricts most of the households in Riga and Latvia to find a suitable home and neighborhood. Therefore, it is important to understand what you can actually afford. We recommend to evaluate your budget – income and expenses:
⇒ total monthly income of household (categories: salary, income from business, other income)
⇒ total monthly expenses of household ‘excluding the cost of housing’ (categories: food, transportation, clothing, savings, recreation, medicine, personal expenses)
Household’s total budget expenditure size will change depending on what is the purpose: property rent or purchase. The household will devote monthly rent or mortgage payment (understanding the mortgage payment structure) based on the size of the monthly budget. The more detailed the household’s income and expenditure account, the better and more efficient decision household can make (even if it is a one-person household).
2. COMMUTE
Riga does not excel as the most efficient transport infrastructure system in Europe, but it is worth to note: where your targeted new home is located? Under “Commute” we count several factors:
– the placement of targeted home in the neighborhood
– time spent on the way to work & back on the way home
– modes of transport which you use to reach your destination.
In addition, it is necessary to examine whether your potentially new home is situated near to public transport. Especially tram, which is one of the fastest means of transport in the city of Riga. Maybe there is a bike path? If you are using a car – will there be a place to park it and how much it is going to cost? The better housing location, the bigger the chances that your family and friends are going to visit you more frequently (hopefully). Plus, you will be able to quickly get to your destination (work, school, shop, etc).
3. FEELING
Personal feeling – plays an essential role to make a decision on choosing a home and neighborhood. Household often pays insufficient attention to “feeling” criteria. This can result in buying/renting inadequate home and choosing the wrong neighborhood. To understand the household decision-making process Urban Treetops team has prepared a “Household decision on choosing a neighborhood and home” process scheme.
Based on Household decision on choosing a neighborhood and home process scheme a household will be able to choose the most suitable housing option and neighborhood.
4. ACTIVITY
The decision on housing options and neighborhood can be affected depending on person’s habits, beliefs, and character traits. At the “ACTIVITY” step, you should ask yourself the following questions:
– what is your / your family’s daily routine?
– what do you / your family want to achieve?
– what do you / your family want to see on a daily basis?
To find an answer to these questions you should understand what kind of neighborhood do you prefer: City Center or the so-called sleeping neighborhoods.
5. CONTRACT
One of the most important aspects that person is facing is – signing a lease (rental) agreement or a contract on a home loan.
“Carry out due diligence! What do you know about
the housing option/lessor/bank (issuer)?”
It would be extremely beneficial if you could find out information about the lessor or bank. What are the reviews from other people? Examine available information before you undertake any contractual obligations.
“To a large extent household’s future cash flow will be affected
depending on the contract terms.
Beforehand, it is necessary to consult with your lawyers or other
specialists. It would not be advisable to a person with no
previous knowledge to enter into these types of agreements.”
6. PROPERTY MANAGER
A large part of the potential property owners and tenants ignore the property manager’s quality of work by choosing low-quality and cheap service property managers. This often creates a situation where the property manager is inefficient by practising a poor quality maintenance and lags behind promised tasks. All of this increases the cost of housing maintenance.
