Last Updated on July 19, 2023 by Umer Malik
Whether you are buying or selling a home, or an investment property, you need to figure out its actual worth. What is its true value? In order to find the answer, you first need to understand the factors that can have an impact on its value. There are a number of factors that can determine the value of your property and you need to be aware of them because it comes in handy for pricing. Asaf Izhak Rubin has discussed some factors that can affect your property’s value below:
‘Location, location, location’; this is the mantra when it comes to determining a property’s value. The location of the property will make a great difference. Is it located in a sought-after destination? How close is it to shops, schools, restaurants and other facilities? How is the crime rate? According to Asaf Izhak Rubin, the more accessible, safe and popular the location, the higher the value of the property.
Usable space and home size
If you check the market value of a property, you will notice that it is usually specified per square foot, which means the sale price of the property is divided by its square footage. Other than square feet, the usable space is also used for determining the price. Attics, unfinished basements and garages are usually not included in this. The home’s value usually depends on the number of bedrooms and bathrooms it has.
Condition and age
Another factor that can play a vital role in determining the value of a property is its age and condition. As per Asaf Izhak Rubin, the newer the property, the better chances of a buyer willing to pay more because it will not require major repairs or renovations. The condition of the structure is also taken into account because people would prefer buying a 20-year old home that is in excellent condition, as opposed to a newer one that requires a ton of repairs.
Updates and upgrades
One of the top ways to significantly boost the value of a property is through home renovations, upgrades and updates. According to experts like Asaf Izhak Rubin, this is particularly applicable to older properties that may have outdated features. Bathroom and kitchen renovations are some improvements that can could give your home’s value a solid boost. You could also think about increasing the number of bedrooms. Another major factor is to improve the property’s curb appeal, which refers to its outer appearance. If you spruce up your garden, you could actually increase your home’s value by 20%.
Supply and demand
The value of property also depends on the push and pull of demand and supply. It is understood that the price of properties will go up if there is high demand and supply is fixed. One of the ways to increase supply is to divide a large existing structure into smaller units or constructing new properties altogether. Prices go down when supply surpasses demand.
Real estate comps
You can speak to any real estate expert like Asaf Izhak Rubin and they will tell you that checking the price of comparable properties, called comps in the real estate industry, is the best way to determine the value of a property. You can compare the properties in terms of theyear they were build, number of bedrooms and bathrooms, square footage, type of home such as multi-family, single-family, or condos and the location like near a busy street, beach or mall.
Another prominent factor that can affect the property value is the level of interest rates. If interest rates rise, mortgages can become expensive and this means that property prices go up. A reduction, on the other hand, can make a property more affordable. Therefore, Asaf Izhak Rubin suggests you check the interest rates trend before you calculate the value of a home in order to make a well-informed decision.