Dave Ramsey Recommends This Home-Buying Strategy to 'Give Your Home’s Value the Most Room to Grow'

Before buying a house, you should read this advice from Dave Ramsey.

When you are buying a home, you need to think about the purchase as both an investment and a place where you'll live with your loved ones.

That means you need to be smart about what property you purchase in order to maximize the chances that your home will go up in value. If your property appreciates, you can then sell it at a profit when you move, generating more than enough to pay off any remaining mortgage loan balance and ideally leave you with some cash left over.

If you want to maximize the chances your property will end up being worth more than you paid for it, finance expert Dave Ramsey has some advice for you.

Ramsey suggests finding a home that has room to grow in value

On Facebook, Ramsey recently made a simple suggestion that would-be homeowners should take a look at if they want to make sure they're making a solid investment when buying their home.

"When searching for a home, look for the least expensive house in the best neighborhood you can afford," Ramsey suggested. "The strategy of buying a home on the less expensive side of a neighborhood's range will give your home's value the most room to grow while still allowing it to be appealing to buyers later on."

Ramsey explained this is a good strategy because most people who are looking to live in a neighborhood with homes at a particular price point -- such as $300,000 -- are not going to be interested in buying a house that's priced at $500,000. They're going to want a home that's comparable in value to the others around it, or even priced a little bit below it.

Is Ramsey right?

Ramsey's advice is very common in the real estate world and it is definitely advice that you should follow.

If you buy the most expensive home in a given area, you'll narrow down your pool of potential buyers. Most people looking locally won't be able to afford it, and those who are seeking homes in that price range will likely want to be in a better neighborhood where they don't stand out from the crowd.

If you buy the least expensive house, though, you will get the benefit of the neighborhood's location and amenities but at a lower entry price. You will have a wider pool of buyers who can afford to purchase your home later. And, your home will look like a bargain compared to the others on offer, so people who are stretching to get into a given neighborhood will be more attracted to it.

You also have room to make improvements without over-improving the house for the neighborhood. That means you can make the space better for your family without worrying about not making your money back.

So, when you're looking for houses, be sure to keep Ramsey's advice at the top of your mind and always be on the lookout for the bargain property in the best neighborhood you can afford.