Press Room

Top 6 Factors That Affect Home Valuation

When you are looking for a property, new home or starting a home renovation, it is important that you understand the factors influencing the property valuation. To aid your decision-making process, listed below are a few factors that can affect the appreciation or depreciation of a real estate investment or the property valuation.


Everyone has heard the axiom “location, location, location”, and the reason it is such a prevalent cliché is because there is truth behind it. Proximity to employment centers, medical facilities, shops, and schools is a determining factor for many families and young couples when buying a home. Proximity to a wide array of local amenities and good transport links increases the value of your potential property.

Geographical Stability

This is a condition specific to areas of geographical or geological instability. Areas that are prone to the effects of natural phenomena, such as flooding, tsunamis, earthquakes, or volcanic activity, are poor choices when buying property. You would be considering the aspect of your family’s safety, in addition to your loan viability and your insurance costs.

Age and Condition

The age of a property doesn’t automatically reduce its value. However, the condition of a property makes a huge difference. An old but well-maintained property can achieve a valuation that is the same as that of a new build of equivalent specifications; sometimes, even higher.

Keeping your potential property well-maintained will keep its value high. When you take out home loans, you should remember that the property must retain the level of valuation at the beginning of your loan, or a higher level of valuation.

Size and Improvement

The size of a home affects the initial value of the property. Good renovation also helps to increase property value. However, making poor renovation choices will cause your potential house to depreciate in value. For example, increasing the number of bedrooms and bathrooms is a good move to increase the value of your home, whereas removing facilities or reducing the number of bedrooms is not.

You can take loans for doing home improvement. When you are approaching a provider of loans for a home improvement or refinancing package, you should address how much the modifications will increase the value of your potential or existing property. The benefit should be equal to or more than your loan.

Population Movement

In any country, population densities move to areas that are more attractive. This is a slow process and can be difficult to predict or identify. However, you should understand how this phenomenon may affect the value of your potential property.

If the employment hub of a city moves from the center of the town to the outskirts, half of the city will have to travel farther to work, reducing the value of a real estate property in terms of its ‘proximity to employment hub’ factor. The other half of the city in turn receives a boost to their property values for being closer to the employment hub.

Surrounding Area

No one can predict the future, but when you are buying property, you should pay attention to the surrounding area. Homes built in developing areas are subject to the whims of the developers operating in the vicinity. Paying close attention to the developments that are in motion (or those planned) for the areas adjacent to your property will be a key factor in determining the increase or decrease in value of your real estate investment.

These are just some of the main factors that can affect the longevity of a real estate venture and valuation of property.

These are some of the main factors that affects property valuation but there are more.We would like to hear from you about them.

Reference: goodhomeadvisor


Leave a Reply