Whether you are selling, looking to buy a new family home, or acquiring an investment property, the property value is always relevant to your asset portfolio, even if you never plan to move or sell.
Owning property can increase your lending power and your ability to invest in other financial opportunities making it easier to build wealth and prepare for a comfortable retirement. Below we have listed five crucial areas that can determine your property value. Read on to learn more.
You may have heard a term commonly used in real estate circles “location, location, location”; this refers to the value of your property’s surrounding area rather than the property you may be looking to acquire. You may have heard the term “buy the worst house on the best street”; also good advice. Houses can be renovated, repaired, or knocked down and rebuilt; the land will always hold the most value, so keep this in mind, especially if you are purchasing an investment property.
2. Property condition
While the land holds the most value, the property itself is what someone wishes to dwell in, so its condition significantly contributes to its overall value. While some people are looking for a renovator’s dream and do not mind a little property maintenance, most people will want to comfortably move in and live in the property before committing to any major work. Whether you are looking to buy or sell, a pre-sale home inspection could either get you a better price or give you more leverage on your negotiations and is well worth considering.
3. General demographics
The demographics of your properties surrounding area can significantly impact your property’s value, even if it’s a big house on a nice property.
Some of the aspects of your property’s surrounding demographics may include:
- Schools and education facilities
- Access to safe public transport
- Appeal of the surrounding properties
- Access to amenities like shopping centers and markets
- Access to sports and recreation facilities
- Suburb reputation and more
While this is a complex topic, there is no denying how much of an impact these factors can make on your property’s overall worth.
4. Size and functions
If you are selling, the potential buyers will often be swayed by the size and functions of the dwelling. While some will look at renovation potential, many want a place to call home immediately.
When discussing the size and functions of the home, we are referring to the property size more than the entire block. This can include features such as:
- The number of stories or levels
- How many bedrooms and their size
- The size of the bathrooms, toilets, and ensuites
- The size of the laundry and storage
- Energy efficient, sustainable utilities, like gas, rainwater, and solar
- Smarthome functions and security
- The kitchen size and appliance quality
- Shed and built-in storage capacity
- Outdoor entertainment areas and more
If you have a smaller than average property for sale, it is worth making your home as clean and clutter-free as possible to make the limited area look spacious. This may require removing some furniture and decor, and you may also want to consider hiring a professional cleaner to get that showroom finish. If you are looking for expert house cleaning services in Los Angeles, you can’t surpass the experienced team at Nancy’s Cleaning Services, who have provided professional cleaning solutions in the L.A. area since 2004.
5. The state of the economy
The local and global economy may be one of the biggest determining factors in your property’s value, and unfortunately, something an individual has little control over.
Things to gain literacy for leverage in any economic climate include:
- Property demand and market performance
- Interest rates
- Property taxes
- Local real estate demographics
- Current lending criteria and more
Gaining firm knowledge of the economy, especially in terms of the real estate market, gives you more power as a buyer and seller, so best to learn the basics as a minimum.
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