The value of a property is not static. Many variables can influence and change property values. Knowing what these are can only help when you are looking to buy, sell or invest in real estate.
If you are looking to improve the results of your property valuation, it is important to keep in mind there are many factors you cannot control. There are, however, some improvements you can make that could add to your property’s overall value.
But first, here are some of the important influences on a property’s value…
Location
Location is a major influence on property value. This is due to the large number of variables that contribute to housing prices based on location. Location has more weight in value than features. The same home in a desirable suburb of a major city can sell for double or more than one in a rural area.
The locality of the valuer can also affect your valuation report. If a valuer is not local to the area, they might be unaware of certain factors that need to be considered when determining property value.
When considering location, a valuer takes into account a location’s proximity to schools, shopping centres, parks, public transportation and other amenities. If a suburb does not have what a prospective buyer or tenant is looking for, then they will consider buying in another area. Should this happen frequently in a particular locale, its property values are lowered as a result.
Size
Many people look at the size of a property when they are considering the purchase of a new home. Particularly if this is a second or retirement home. While size can play second fiddle to the location of a property, it cannot be ignored. When a valuer is calculating the value of a property, its size is an important figure.
For a valuer, the total area is what matters. To buyers, tenants and even investors, the desirability of a residence may be more affected by the number and size of the bedrooms, bathrooms, and other living spaces. As such, these dimensions as well as the layout can contribute to property value.
Condition
Naturally, the condition a property is in will make an impression on any buyer or tenant. If a property is in poor condition it will sell for less, as buyers factor in the costs of cleaning and upgrading in their negotiations.
Because of this, any issues with the building are noted during the inspection and may impact the value given in the report.
Any large, structural issues which may be considered safety hazards will have the largest influence on the property value. Smaller cosmetic damages to the property won’t have as much of an impact, although if they are consistent throughout the property they may be considered.
Small amounts of damage or imperfections are almost unavoidable with older properties. Therefore, properties which new and upgraded finishings are often given a higher value.
Improvements
Additions such as renovations, significant improvements or added features can all positively impact the findings in a valuation report. This is one of the factors which homeowners can use to their advantage when preparing for a valuation.
Improvements that will add value to your home include:
- Adding additional rooms to a building
- Making improvements to the exterior of the building
- Installing outdoor features such as a pool, deck, or shed
- Improving interiors with home upgrades such as kitchen or bathroom renovations
- New flooring or fresh paint
- Landscaping of garden and yard
All of these improvements could be factors that help to increase the final value figure during a valuation.
Additional Factors
As well as those listed, some additional factors will influence a valuation. Not all are physical attributes and valuers know what should be considered for each property they assess.
One of these considerations is environmental risk. For example, if a building and/or land is in an area prone to flooding this will impact the final valuation.
The market condition at the time of valuation is another additional consideration. While completing the valuation report, the valuer will conduct research into comparable recent sales data in the local area which will indicate what the property could sell for in the current market.
All these factors influence the property valuation and assist the valuer in reaching an accurate current market value for the property. If you are considering purchasing or selling a property, reach out to our team today for an independent property valuation.