Your property’s value is affected by many factors other than its looks. As a property owner, knowing the factors that may affect your property’s value will be a huge advantage if the time comes that you may decide to buy another or sell your existing property.
The first thing that any property buyer or seller will consider when buying a home is its location. In the same vein, a property’s location can easily make or break its value. A simple one-bedroom flat located in a central business district can easily cost more than a two-bedroom single home located farther in the suburbs. An area with a low crime rate and good school system is more valuable than the opposite.
If your property is conveniently located near modern amenities, that usually has a positive effect on the price. The existence of grocery stores, shopping centers, and other commercial establishments nearby certainly adds value to your property.
Demand for similar properties in the neighborhood
How much similar properties within your neighborhood have sold also affects your property’s value. For example, you bought a house for $100,000. Then you found out that after a few years of holding onto the said property, a similar property sold for $300,000. Should you decide to sell your property, it would no longer take so much effort to sell it at that range. Since the market forces have already priced a similar property at $300,000, selling yours for the same price will no longer be a surprise nor unusual.
Outside of the property itself, the quality of your neighborhood can affect value. A well-maintained neighborhood will make homes in that area more valuable.
Type of house and livable space
In the real estate market, absent other determining factors, the usual metric that buyers or sellers look into is the price per unit of a property. That is its price per square foot.
If a property is either too expensive or too cheap, square footage-wise, that’s the time a prospective buyer will check how the space was utilized. This is where your smart usage of available space comes in. If you’ve allotted a lot for usable spaces, then that gives more value to your home. On the other hand, the value decreases if a huge part of the square footage cannot be lived in; that is, they’re allotted for things like garages, attics, or unfinished basements.
Age, Condition, Upgrades
The common practice in the real estate industry is that the newer the home, the more valuable it is unless other factors are considered in pricing an older property such as historical value, rarity, and reputation.
Naturally, well-kept properties with functioning electrical, plumbing, lighting, and HVAC systems are also more expensive than a dilapidated and abandoned one.
Generally, upgrades that you introduce to the home, such as an updated kitchen or hardwood flooring, will add value. However, it is also quite possible that the upgrades will be rendered useless if the buyer has no use for the upgrade. A large, fully-equipped game room for a single bachelor is an example.
To truly determine the price of a home, we suggest you talk to your local real estate broker. They usually keep abreast of the latest property trends and prices within your area. If it’s possible, talk to several agents until you get a clear picture or range of the property market. If you have questions about the home buying process or need help figuring out what to do next, don’t hesitate to contact Total Lending Concepts.