Balanced Scorecard for Realestate

I’ve been thinking of buying a house recently. But I realised I’m not sure what to actually factor in when considering buying a house. There seem to be a few things to consider. Especially considering the leverage involved and the need to hang onto the asset for nearly 30 years, it makes you stop and think it through - more than buying shares.

So far I’ve gone about listing all the things I should consider when buying a house:

• Distance to CBD

• Transit time to work

• Transit time to family

• Property type (apartment, townhouse, house)

• Crime in suburb

• Expected house price growth

• Expected rental yield

• Price of house

• Desirability to live there

The key components of my scorecard will be:

• The factors to consider (the list above)

• The weight of each of those factors (for example how much do I care about Distance to CBD vs the Crime in the suburb)

• A measure/score for each of the measures (for example - how to you “measure” crime

So ideally I need a have a way of measuring each of the factors, or at least providing my own perceived score. Meaning what would I consider being a “low, medium or high” score for each of these.

By the end of the process I should have a way of considering all the important factors when buying a house. I should also have a way to rank potential houses.

Hopefully this process will stop me from blindly “falling” for a house and ensure I’ve considered both short term and long term factors when buying a house.