FACTORS AFFECTING PROPERTY VALUE

When you are seeking for a property or new home, it is important that you understand the factors influencing the property valuation. To refine your decision-making process, listed below are a few factors that can affect the upgradation or degradation of a real estate investment or the property value.

1. Location

The prime factor that strikes everyone’s mind first is the location of the property they are going to buy. Employment centers, medical facilities, shops, and schools are a determining factor for many families and young couples when buying a home. Exposure to a wide array of local amenities and good transport links increases the value of the potential property.

2. Geographical Stability

Geographical stability is another important factor that is taken into consideration while looking for a property. Areas that are prone to the effects of natural calamities, such as flooding, tsunamis, earthquakes, or volcanic activity, are poor choices when buying property. You would be concerned about your family’s safety, in addition to your loan viability and your insurance costs.

3. Age and Condition

The age of a property doesn’t directly reduce its value. However, the condition of a property makes a vast difference. An old but well-maintained property can achieve a valuation that is the same as that of a new build of equivalent specifications. Keeping your potential property well-maintained will keep its value high.

4. Size and Improvement

The size of a home affects the initial and basic value of the property. The good renovation also helps to hike the property value. However, making poor renovation choices will cause your potential house to reduce in value. Updating kitchens, replacing flooring, repainting walls, and adding landscaping can add to the value of a home.

Home loans can be taken for improvising the existing property. An expert should be consulted to renovate in a professional and specialized way to earn better profits. The benefit earned should be equal or higher than the loan taken.

5. Population Movement

In any country, population densities incline to areas that are more attractive. This is a slow process and can be difficult to predict or identify. However, you should understand how this dynamics may affect the value of your potential property.

If the employment hub of a city moves from the center of the town to the outskirts, half of the city will have to travel farther to work, reducing the value of a real estate property in terms of its ‘proximity to employment hub’ factor. The other half of the city, in turn, receives a boost to their property values for being closer to the employment hub.

6. Legalities, taxes, urban zoning

Taxation zoning, government development, and economic stability play an important role in the longevity of real estate. Changes to zoning within a town or a city can influence the value of a property. Increased taxation in the center of the city will decline the value of residential property in the area, making it cheaper for residents to live outside the center and commute.

Conversely, this could also increase levels of property value by introducing a new employment hub.

7. Surrounding Area

The neighborhood or general area surrounding your home can adversely affect your home's value. Some neighborhoods are more desirable than others. Also, some areas are avoided because of major traffic or highly busy roads due to commercial activities.

Paying close attention to the dynamics of developments (or those planned) for the areas adjacent to your property will be a key factor in determining the increase or decrease in value of your real estate investment.

So, location, improvements, general area and the time of year can affect property value. Keeping in mind the key factors, the value of the property can be increased multiple times.