Key Factors to Master Property Valuation
When you’re on a property hunt, looking for a new home or simply starting a home renovation, understanding the factors influencing property valuation is crucial. To help you take the right decision, listed below are a few common factors leading to appreciation or depreciation of real estate investment.
Perhaps the most influential of all is location and there’re many reason to it. Convenient access to medical facilities, schools, shops, employment centres and many other public places determines if the facility is suitable for family, young couples or all. The closer the amenities and transit links, higher would be the property value. Also, real estate units located in rural areas are less costly as compared to those in the city centre or major business enclave.
- A stable geography
Second in line is the geography that takes into account natural phenomenon affecting the area such as floods, earthquake, storms and much more. Geographic stability or instability factors a lot with property valuation as it defines a buyer’s choice of poor or wise investment. Whether living solo or with family, safety is prioritised above everything else in addition to the loan viability and insurance costs following closely!
- Property: Age & condition
Age of a particular property doesn’t automatically reduce the value however, present condition makes a huge difference. Consider an age-old unit that’s well-manicured and spruced up with the latest features is likely to be valuated more than the buildings and units developed recently or maybe equal. It defines a well-maintained property keep its value high. When taking out home loans, remember that property must hold the valuation level at the beginning of the loan or even a higher level.
- Size & improvement measures
Like the old axiom goes; “size matters most” and with home value, this is indeed true. While good renovation helps boost the cost as well as size, how a home has been organised also makes a huge difference.
Increasing the number of bedrooms and bathrooms with appropriate strategies would imminently raise a home value. On the contrary, partitioning a seemingly huge property and pricing each individually is wise and may bring more profit; keeping location, geography and closeness to amenities in the book.
The larger or extended area of a home, better the value as opposed to a suite and other single room projects. There’s also a probability of homes with fewer but larger rooms selling at a higher price depending on the layout and overall design aspects.
Imagine an open layout with less partitions and walls; it’s more spacious and likely to appeal a prospective buyer. You can even take loans for home improvements from well-known finance companies as well as banks however, be sure you borrow a sum that can be reimbursed easily.
- Inhabitant migration factors
In any country, residents; be it local or international prefers living in attractive areas that offer peace, safety and convenience. The process is slow and sometimes difficult to predict, you need to understand how this particular phenomenon affects overall cost of a property.
If major business and employment opportunities are at the city centre whereas residential units in the outskirts, it’ll add to the travel access and thus reduces value of real estate property. And those residing in the business hub enjoy imminent boost in housing cost.
- Government laws, urban zoning & taxing
Governmental development, taxation zoning and economic stability play a crucial role in long-term survival of the real estate. Any change either from economic fluctuation, development projects or zoning seriously impact the property value.
Rise in tax at primary metropolitan area decreases value of residential units in the area, therefore making it cheaper for inhabitants to live in the outskirts and commute frequently to different areas. Likewise, zoning an area that has been classified for residential or industrial development may also decrease value of a particular property as well as adjacent units.
Conversely, if you turn it into a new employment hub, property value is likely to levitate.
- Surrounding area(s)
Future is unpredictable but when it comes down to purchasing a property, you need paying attention to the details such as immediate neighbour and surroundings.
Residential units located right in the heart of development project faces many different issues such as noise and air pollution, disruption in electricity, gas and water supply (rare but possible), broken roads and more.
Paying close attention to all the construction in motion or those planned for the near future would help in taking a sound decision on purchase as well as property valuation.
Before concluding I’d like to mention a property management firm in Dubai for sharing inner insights on property valuation aspects. Listed above are some primary aspects that can affect durability of real estate venture and overall cost. With time, there can be several changes in the factors but we’ve discussed standard features that have been there right from the start.