Very often, your house isn’t just a shelter above your head and a place for living, but also an investment asset. Its value has the tendency to appreciate or depreciate subject to market conditions. Therefore, to ensure higher valuation of your property, it becomes necessary to take into account the factors affecting its value. In this article, we attempt to simplify these key factors and suggest some ways in which you can increase the market value of your home.
See also: How does change in under-construction property value affect a homebuyer?
Factors affecting property prices
The first step towards taking steps to increase the market value of your home is to understand the working of the factors it is governed by. Following is a list of such key factors:
Location
The location of the property is such that amenities like schools, parks, commercial centres and transportation hubs are in close proximity, its value is significantly raised. Neighbourhoods with low crime rates and good schools in the vicinity are often preferred by homebuyers.
Size and layout
The surface area of the house, number of bedrooms and bathrooms housed, and the overall layout and flow can affect its value. It is important to ensure that the home is not only spacious, but also functionally and manageably laid out.
Condition
Consider the overall condition of the property. This includes its age, maintenance history and any recent renovations or upgrades undertaken. Well-maintained homes that are frequently updated with modern amenities command higher prices.
Comparable sales
A simple way of determining the value of your house is by considering the prices of similar properties sold in the same neighbourhood. These prices are known as comparable sales or comps and serve as a benchmark in the process of the valuation of your property.
Market trends
Market trends, such as demand dynamics, interest rates and economic conditions in the local housing market, have considerable impact on property values. Prices are directly proportional to the demand, meaning they tend to rise in a seller’s market with high demand and limited inventory.
Upgrades and features
If you regularly make upgrades to your space to incorporate the latest technology and features, your home’s value can significantly rise. A renovated kitchen, updated appliances, energy efficient systems and additional amenities such as an outdoor living space are some features that are in high demand.
Neighbourhood development
Planned developments and infrastructure projects in the vicinity of your property or changes in zoning regulations in the area has an impact on property values. The value is raised due to positive developments like schools or parks and decreased by factors like commercial development of increased traffic.
Historical value
Heritage homes or properties flaunting unique architectural features and cultural significance have higher value. Their rarity and historical appeal makes them a lucrative investment.
Economic factors
Property prices and demand are influenced by local economic conditions, job opportunities and income levels in the area. Strong economic growth is directly linked to the rise in property values.
Environmental factors
Environmental considerations like proximity to beaches and parks, natural views, potential hazards such as flood or earthquake zones, or industrial sites can impact property values depending on their effect on the property.
Ways to increase the value of your house
The market factors affecting property prices are not in our control. So how can you ensure the highest possible valuation for your property? Here are some areas you can pay attention to in order to raise the value of your property:
Renovate and upgrade
Consider investing in renovations and upgrades that enhance the functionality, aesthetics and energy efficiency of your home. Kitchen and bathroom upgrades and updating flooring and fixtures are areas that yield a particularly high ROI.
Enhance curb appeal
Improve the first impression of your home by enhancing the curb appeal. Landscaping improvements, exterior painting, repairing or replacing the roof, updating the front door, incorporating outdoor lighting and other decorative elements can help in this venture.
Improve energy efficiencyÂ
Energy efficient appliances, windows, insulation and HVAC systems go a long way in reducing utility costs and increasing the property’s appeal to eco-conscious buyers. Such upgrades increase both monetary value of the property and its appeal to potential buyers.
Update kitchen and bathrooms
Kitchen and bathrooms are highly essential spaces when it comes to functionality, thereby making them key considerations for potential buyers. Modernising these spaces by incorporating new cabinets, countertops, appliances and fixtures can significantly enhance their appeal and functionality.
Incorporate additional living space
Increase the living space, and in turn, the surface area by finishing basements, attics or adding room extensions. This can help increase your home’s square footage value and provide more space for living and storage.
Increase storage
Add built-in shelves, closets or organisational systems to enhance storage options throughout the space. Abundant storage space is a highly valued feature and can make your home more attractive and functional.
Enhance the flow
Make the transition between indoor and outdoor living spaces seamless by incorporating decks, patios or outdoor kitchens. Utilising the outdoor living areas can increase the usable space of your home and make it an appealing prospect for buyers who prefer some outdoor relaxation.
Address maintenance issues
Make sure to address any deferred maintenance issues, such as repairing leaks, fix8ng plumbing or electrical problems, replacing worn out siding and addressing structural issues, before putting your property on the market. A well-maintained home implies that it has been properly cared for and is less likely to have hidden problems.Â
Consider smart home technologyÂ
Programmable thermostats, security systems, lighting controls and smart appliances can be incorporated to amp up your space. Such additions enhance convenience, security and energy efficiency, making your home more appealing to young buyers.
Consult with a real estate professionalÂ
Local real estate agents or appraisers can provide insights into the factors and improvements that will yield the highest ROI in the market in question. They can also provide a more precise valuation of your upgraded home.
FAQs
What home improvement projects can help increase its value?
Kitchen and bathroom renovations, expanding the living space, enhancing curb appeal and improving energy efficiency can yield a high ROI.
How much should I budget for home improvements?
Depending on the scope of the project and location, the budget may vary. It is important to do thorough research and obtain multiple quotes for comparison.
Should I hire professionals for home improvement projects?
While you can go for DIY projects, seeking professional assistance is recommended to ensure quality and compliance with safety codes.
How can I enhance my home's curb appeal?
Landscaping, painting the exterior, upgrading the front door and adding outdoor lighting can help enhance curb appeal.
What are some cost effective ways to ensure energy efficiency?
Upgrade to energy efficient appliances, replace old windows with double panes, add insulation, seal air leaks, install programmable thermostats and opt for renewable energy options for this purpose.
How effective is smart home technology as an investment to increase property value?
Smart home technology can enhance convenience, security and energy efficiency, making the property more appealing as an investment asset.
How can I ensure I am making the right improvements for my home?
Research local market trends, consult with real estate professionals and consider the preferences of potential buyers to determine the efficacy of your improvements.
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
