A quick checklist to the prime factors that influence the value of a home
There are many factors affecting property value of a home as there is no standard formula to determine the worth of a property. However, if we are to point out the prime factors that influence home value, we can have a look at the following.
1. The neighborhood
One of the primary aspects that homebuyers prioritize while investing in a property is its proximity to their workplaces, schools and public transportation. Also, proximity to grocery stores, shopping and entertainment venues and access to the major highways are among the factors that will affect property value.
2. Property Size and usable space
It goes without saying that while estimating a property’s market value, its size is an important aspect. The value of a home is estimated at price per square foot. If a 2000 sqft house is priced at AED 20,000 then the price per square foot is AED 100.
Besides square footage, a home’s usable space also plays a very important role while determining its value. Garages, attics and unfinished basements are generally not considered a part of usable space. So if a property has an area of 2000 sqft with a 600 sqft garage, then its livable space is only 1400 sqft. As livable space matters the most to buyers, a home with more bedrooms and bathrooms generally fetch more price than others.
The value of a home is greatly influenced by the amount of privacy it offers. A property having its backyard exposed to its neighbours or located too close to its neighbouring homes will affect its privacy. Such a property will not sell for a good rate as no buyer will be ready to shell out a good price for a home that lacks privacy. Therefore, it is important for a homeowner to make sure that his property offers complete privacy if he wants to benefit from a good selling price.
It is very important for a property to be in good condition for it to fetch a good value. A home with issues like problems with structural timber, leaks, plumbing errors and broken tiles will negatively impact the price of a home to a great extent. Therefore, it is of utmost importance for a homeowner to make sure that his home is in excellent condition so that it can fetch him a handsome selling price.
The age of a home is another important factor that affects the value of a home. An old property generally does not come with a good market value and makes it difficult to earn a good resale or rental value. Due to this reason, the trend of upgrading and remodelling homes has started to grow in the market. A home renovated to a high standard is sure to fetch a good price than the ones that haven’t been upgraded or renovated.
A number of homeowners have also started to furnish their homes before selling them off as they command a higher price. Prices of furnished homes also vary from one another based on the standard and quality of their furnishing. Luxurious homes that come with branded kitchen appliances and good quality furniture are more expensive than the ones that lack high-end furnishing.
5. The state of the Housing Market
Generally, the housing market runs in cycles and alternates between favouring buyers and sellers. When supply is low and there is a surge of buyers, prices of homes go up. Conversely, a market with few buyers but more homes results in a drop in prices.