If you are planning to buy a new house, the first thing that you will surely look at is the property’s physical characteristics. While they have a major influence on the overall value of the property, it is not only the physical structure that affects the value of a property. There are many reasons property accumulates value, such as limited supply. If the population continues to increase, the demand for land is also affected. When there is more demand, the prices of property go up over time. When investing in a property, you should also take proper timing into consideration.
Before you consider investing in a property, you have to make sure that you know the factors that determine the value of your prospective home. When you understand the impact of land value, it will be easier for you to know the best time to invest your hard-earned money into a property. The value of a property is influenced by the following factors:
Locations
One important factor that can increase the value of your property is its location. Not all spots are considered safe for younger children. If you choose a property far from the busy roadway, expect the value to be higher. Each and every subdivision has its own cultural, demographic and social characteristics that can affect the demand for properties and value of houses.
Age of neighbors
Another essential factor that influences that overall value of a property is the average age of neighbors. More often than not, buyers with small children prefer neighborhoods that are capable of providing playmates for kids. If your house is situated near public schools, it can also contribute to your home’s value.
Renovation Potential
Although this factor is not given much thought, the renovation potential of a property becomes relevant when the homeowner decides to sell the property. A property that has renovation potential makes it easier for buyers to add an extra bedroom, increase the floor space, or add a pool or patio. You can expect the value of your property to increase if there is an extra room for buyers to improve or personalize a property.
Space and size
The size and usable space of a property can affect the price. If there is a usable space for an extra bedroom or bathroom, the home value is likely to increase. When it comes to the real estate property’s market value, the price is measured per square foot. The total sales price is determined by the square footage of a property. If you have a property measuring 1500 square feet, you can expect to sell it for $300,000 with a price per square foot of $200.
Interest rates
You should take note of the interest rate as it is also considered a major factor that affects your home value. If the bank decides to increase the loan interest, the course of action of most lenders is to follow suit, which can affect the amount of money that the borrowers have to pay for their mortgage. When properties have expensive mortgages, homeowners have to sell them at a higher price. If the interest rates are reduced, the property will also be more affordable.
Talk to a property specialist so you can discuss your options before buying a home.