Your house is more than your home if you own. For the average American, a home is the biggest investment they’ll ever make. Unfortunately, the 2008 recession showed just how closely people’s wealth is tied to their home. Buyers have learned that value is something that should at the top of the wish list.
But how do you know if a home is a good value? Working with a real estate agent is a good first step. They can use information on recent sales to determine if a home is priced well. There are also several home value indicators you can find on your own.
Location, Location, Location
There’s no way to get around the fact that location significantly impacts the value of a property. Location is the one thing you can’t change about a property no matter how much you try. You can have the most beautiful mansion in the world, but if it’s right next to a landfill you’ll never realize the full value.
In addition to nearby industrial and commercial properties, other indicators of prime residential location are excellent schools, low crime rates and the neighborhood activity. One mistake buyers make is only checking out a location during the day. To get the most accurate idea of what a location is like, visit at various hours and different days during the week.
To really build value and appreciation potential look for up-and-coming neighborhoods where trendy businesses are moving. You’ll get a home before prices start to increase, but you may have to be part of the transition.
In real estate scarcity usually equals value, especially if the property is in a popular location. Ultimately, real estate prices are driven by supply and demand. When the supply is low and the demand is high, it’s a seller’s market and prices will begin to increase.
For example, the team at Berkshire Hathaway Homeservices notes that Coronado Cays real estate is extremely valuable because land is limited on the island. The same holds true in gated communities where there are a select number of home sites.
The better the neighborhood is overall the more likely it is to appreciate and catch the interest of buyers. When neighbors are invested they’re going to upkeep their homes, take time on the weekend for landscaping and help make the neighborhood an enjoyable place to live.
If you want a better guarantee that a neighborhood will continue to improve, look for homes that are in a homeowners association (HOA). There will be an added expense in the form of HOA dues, but the association will enforce standards and upkeep requirements.
Great Neighborhood, Worst House
Once you find a great neighborhood look for the worst house on the block. If you aren’t afraid of making value-add home improvements, this is a quick way to build appreciation. Essentially, all the other renovated homes are boosting value in the area, all you have to do is invest a little money and sweat equity to see similar price points.
A few years ago walkability was on nobody’s radar. Today, that’s a different story, especially for first-time Millennial homebuyers. Whether you live in a suburban neighborhood or an urban area, people are looking for the convenience of being able to get places on foot. When amenities and entertainment are a short walk away it can boost the desirability and value should follow.
The best way to figure out the walkability of a neighborhood is to get out and actually walk around. You can also enter the address into the Walk Score search tool to get a better idea of how easy it is to get around by walking or biking.
Smart Home Systems
Smart homes are another trend that’s on the rise. As things become more connected, homes with smart features provide more functionality and convenience. Those are two things boost value in the minds of buyers. If you don’t believe it, look at the recent results of a Coldwell Banker survey. The majority (65%) of buyers said they would pay more for a home with smart technology features.
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