Does a brand new home keep its value?

No doubt about it, a newly constructed home has tremendous appeal. Everything is fresh and clean, just waiting for you and your family to move in, and the finishes and fixtures are exactly what you want. True, it costs quite a pretty penny, but you're sure it will be worth it. Or will it? Will your brand new property keep its value … or might it be like a new car, which starts depreciating the minute you drive it off the lot? The answer, you'll see, is not so simple.

Compare the pool of properties on the market -- both new construction and resale -- in terms of price, size, and amenities. Bear in mind, though, that you're looking at apples and oranges; new homes are built to the latest standards of energy efficiency, while older houses usually have the advantage of larger rooms and thicker walls.

Location, location, location is the watchword for real estate investment. Choose carefully where to buy. A new neighborhood that offers a relatively short commuting time plus access to the infrastructure of an established urban area -- but without the sky-high prices -- is ideal.

On a personal level, be sure that you will want to stay in this particular area, in this particular house, for a minimum of 5 years. Otherwise, you're likely to lose a considerable amount on relocation, what with closing costs, moving expenses, new utility hookups, and the like.

When purchasing in a new development, last is not least. If you buy in toward the end of the project, you'll have a chance to see how the area is shaping up as a community and who your neighbors will be. And if for some reason, you need to sell in a year or so, your home won't be competing with newer properties right next door.

Investigate the warranty offered by the building contractor. Typically this guarantees appliances and systems for a year and structural elements for 10 years. Find out which issues the warranty includes. What action will it require the builder to take in case of problems, whether major foundation cracks or small flaws in the home's finishing, like broken backsplash tiles?

Hire a qualified home inspector as a third party to check your new house and to represent your interests at the scheduled construction inspections.

Once you've moved in, take good care of your house and landscape. Regular maintenance will help you enjoy your property more and reduce the risk of future problems such as mold infestation. Avoid DIY for major home improvements or repairs (such as a roof leak or an electrical panel upgrade) unless you yourself are a qualified contractor.

For your decor, choose neutral colors and styles. Avoid cluttered design -- if you must install a kitchen island, for example, make it (re)movable -- and faddy trends that will look dated in another 5 or 10 years.