Factors That Affect the Value of Your Property
So, are you looking to sell your home, or are you perhaps just getting into the real estate business, and are looking to learn more about property value? Whatever the case may be, in this article, we are going to talk about all the most important aspects.
So, which variables cause property values to rise and fall? There are plenty of them, ranging from supply and demand to location, facilities, and planned infrastructure projects. In order for you to understand just how, and why these factors affect property prices, as well as how you can find out what your property is worth, be sure to keep on reading.
Market Value Vs. Assessed Value
When it comes to property value, it all comes down to knowing where to look. This is due to the fact that, well, depending on where you look, the value can oftentimes appear as entirely different numbers. There are two main ways of looking into property value – market and assessed value.
Market value is basically the estimated amount that active buyers would most possibly be willing to pay for your property. It is determined by an appraiser, who is in most cases hired when the lender is deciding on how much money they should provide in a loan, or, you can hire an appraiser when you are setting the list price when putting your property on the market.
Generally, there are several factors that should be evaluated to determine the market value. For instance, the appraiser will inspect the interior and exterior of the property to find any damage. They’ll also consider how many properties in the area with similar features have been sold out to calculate your property’s market value. On the other hand, your property may have a high market value too if it has extras like a swimming pool, major appliances, and other great features.
Assessed value, on the other hand, modifies the market value by putting it in the context of your property taxes since they are a great reference regarding this topic. There are many differences when it comes to market and assessed value, all of which are covered in this helpful guide in order to make it easier for you to understand these terms. In many counties throughout the U.S., the assessed value is merely a portion of the market value, and it’s calculated as a percentage of the market value of the property in question.
The location of a property is probably one of the most obvious factors that affect how much a property in question is worth. The value is going to vary greatly depending on whether the property is close to the city center or in an overall sought-after location. Nearby places of interest are taken into account as well.
When it comes to houses specifically, in general, people want to live as close to where they work as possible, while also having places where they enjoy their free time nearby. Naturally, this depends on the buyer, but some homes, combinatorial speaking, have a higher potential to check these boxes for different people, hence being more expensive.
Then there’s also the fact that some areas simply have a better reputation than others, which also heavily impacts the price. This can result in such a situation where two homes that are just streets apart can differ substantially in values.
Moreover, there are other important factors that can influence a property’s price based on the location. For example, properties with walkable neighborhoods, cultural attractions, and availability of essential facilities nearby may be more expensive than those properties in the rural areas. Also, properties with open spaces, parks, and walking trails and proximity to public transportation and schools are more in-demand, making them more costly.
Size and Facilities
The features that a property is composed of as well as the overall size of a property are also going to influence its worth. Quite intuitively, a four-bedroom house is likely to have a higher value than a two-bedroom house in the same area. Following the same logic, extra features such as more bathrooms, garages, as well as swimming pools, conservatories, and similar play an important role in the value as well. For swimming pools there are options that can help you with installation such as pool installer in Orange County.
When it comes to busy cities, the absence or abundance of parking opportunities is a key variable for the value of the home.
The quantity of features is not the only consideration that matters but the quality of each as well. A property could have three bathrooms, but if they look old and shabby, they wouldn’t add much value to the property or attract more buyers. That’s why it’s crucial to strike a balance between quantity and quality. For bathrooms, make sure to use efficient fixtures, such as water-saving macerating toilets and low-flow showerheads and faucets. Opt for energy-efficient LED lighting for more value and savings. Think of long-term benefits instead of settling for short-term savings.
Supply and Demand
This parameter is quite simple – if the demand exceeds supply in a market in question, property prices are going to increase. This is due to the fact that there are far more people in the market for a smaller number of properties that are available which leads to competition among buyers, finally resulting in prices going up.
Not all the people who buy properties buy them for themselves – a lot of them are looking for investment opportunities. So, the greater the investment potential, the greater the price. Factors such as the rental income as well as capital growth are the most important variables when assessing investment potential.
The potential for growth is always important – both for homebuyers and investors. So, if the property has the potential to add an extra bedroom, an extra story, or pretty much anything similar, its renovation potential is higher, and hence is the property value as well.
This is also a desirable variable for investors, since they are able to renovate the property, the resale value of that property will increase, and that’s a profitable outcome.
A property that’s easy to heat and cool is highly sought after. Also, considering how high the prices of electricity and gas bills can go, items like solar panels, insulation, and double-glazed windows play a big role in raising the value. Be sure to check with a variety of solar companies and window installation companies to get quotes.
On the other hand, there are also other ways that can influence a property’s energy-efficiency. Thanks to the energy deregulation because it drives electricity suppliers to keep up with the competition by lowering the energy prices. Generally, electricity in much of the USA is deregulated. For example, Connecticut electricity rates are very competitive and shopping for a supplier can cut your power bill. As a result, you can make the property more energy-efficiency, thereby driving up its price in the market.
Boosting the curb appeal is one of the easiest, most efficient, and inexpensive ways as well in order to boost the property’s value. It’s all in the aesthetics, and by ensuring that all the details are well assessed, your home value is going to rise as well.
In the end, it all comes down to looking at your property from various perspectives. There is a lot of theory behind all of this, but in practice, it is a lot simpler – do your research, polish your property on aspects which you can affect, and those which you can’t, just be sure to understand them in order to avoid any scams.