When it comes to pricing your home, often times, the emotional value sellers place can skew the reality of the actual value. Whether you are shopping for a new home or selling your current home, getting your money’s worth should be of top priority. It may be more important than you think. Regardless of how much you spent on your home or how much money was spent updating it, the property’s current value must reflect what a buyer is willing to pay in today’s market.
There are several tools that are helpful in guiding you to the best price point. Explore which options are available to you and make the most sense for your financial future.
You’ve probably heard it said time and time again, “Location is everything.” And while that may be true, the location of the home may be just as valuable as the land it sits on. Take a look around your neighborhood and explore comparable properties in the area. If you are not currently working with a realtor, many online resources are available in demonstrating up-to-date real estate transactions.
In addition to the neighborhood the house resides in, many buyers consider the land an appreciating asset. Investors consider the future of that land value in determining to make an investment decision. This decision is highly impactful because land is in extremely limited supply and the demand for it is constantly increasing. Although the home itself is considered a depreciating asset, there are some home improvements that may be worth your while in boosting its value to complement the land’s worth.
Learn more about home improvements that will pay off: https://www.investopedia.com/articles/mortgages-real-estate/08/add-value-to-real-estate.asp
Local development and future development is crucial to homebuyers gauging property value in a specific area. In taking development into consideration, consider both the prospects of commercial and municipal growth in the area. Where are the hospitals? Where are the best community schools? How will traffic patterns positively or negatively influence the area? Some thoughts you may want to consider when pricing your home or purchasing a new home are:
- Is construction currently going on in the area and how long is it scheduled to continue?
- What sort of environmental conditions could impact the home’s location (i.e. flood zones)?
- Are there certain areas of town that are considered safer than others?
The bottom line is, gauging the value of the area surrounding the home may be just as important as determining the value on the home itself.
Aside from the mortgage, any homeowner or investor knows that a lot of money goes into the day-to-day upkeep of the house. While searching for that home, don’t forget about the cost of upkeep for different elements, such as the yard, painting rooms, maintaining the appliances and providing the necessary furniture. Consider any updates you will be needing to make or even the cost for insurance and property taxes. These items are routinely put on the backburner when considering an investment, but should be incorporated as a significant monetary commitment as well.
Some points to consider when tallying up the maintenance costs are: age of the home, square footage, type of roofing, yard size and all structural facets.
Start by making an initial list of all the improvements that you wish to make on your home. While home improvement projects typically cost between 20 and 25 cents on the dollar, the remainder goes directly back to the value of the home. Once you have determined all the projects you hope to complete, estimate a time frame for when you will be officially ready to hit the market.
Start by implementing small improvements, one room at a time. Be sure to add both upgrades that will increase the value of the home and upgrades that will increase the appeal of the décor. Above all, you’ll want your home to be the cleanest possible to attract potential buyers. Focus on curb appeal in the final stages when assuring that your home is ready for its next buyer!