Factors that can decrease the value of your home
Category Property Advice
Investing in a new home can be risky. Ideally, property values are meant to appreciate over time, however, they can fluctuate due to unforeseen measures. While economic constraints are out of an owner's control, some factors that decrease the value of a property can be avoided.
These are the factors that can decrease the value of your home:
The real estate market
If jobs are scarce and fewer people are able to afford to buy a house then the real estate market takes a downswing. As a seller, you will be forced to hold on to your property or lower the selling price. This trend leads to a buyer's market forcing homeowners to lower their prices to compete for a sale. If you are able to hold on to your home during a buyer's market then do so. In contrast, a seller's market occurs when the demand for property is far greater than the supply, allowing the seller to negotiate a better selling price.
Bad neighbours
Having a noisy neighbour who has parties all the time, a neighbour's constant barking dogs or the rising occurrences of street crime and vandalism will reduce the likelihood of eager tenants or a resale. If your community becomes known as a bad neighbourhood then no one will want to invest in it. This, in turn, can dilute your property's value.
Location value
The location of your home is vital when making a purchase as it will affect your resale. Since the home is considered as an immovable asset, it is the value of the location that fluctuates. A residential property that is located closer to schools, shopping facilities, and public transportation will be in greater demand than houses that are located out of the way. Properties in loud areas such as busy highways, airports or train stations can be a turn-off for people in the market to rent or buy. Nearby structures such as abandoned factories, hazardous waste sites or landfills can also devalue a good property. Research the future plans for the area before you make any purchase offers. Stay in the loop to avoid the location being a negative factor in the future.
Lack of upkeep
If your home has not been taken care of over the years it could become a problem. If the house has damages caused by mould or bug infestation, fire or weather damage, sewage problems, or structural problems it can lower the value of the property. Proper renovations can help increase property value and make your home look brand new.
Irrelevant upgrades
While many people assume that all home improvements increase the value of a house, some gestures can also decrease the return on investment. For instance, most people want many bedrooms available in a house, so turning two bedrooms into one is not such a great idea. Buyers also favour closet space and eliminating them can potentially decrease the value of your home. Swimming pools in an area with cold climates, unusual tilings such as checkered kitchen floors, and unflattering wallpaper can further reduce the future selling price of your home.
Is the real estate market working in your favour? Will the area you are eyeing be the next big thing or is it set for failure? Take these considerations into mind before buying or selling your home. Factors that decrease the value of a property can end up costing you much more than what you hoped to get out of your investment. Contact Knight Frank Properties today to secure a lucrative investment opportunity.
Author: Knight Frank