Ever wondered why you sometimes see a $200,000 property on the same street as a $50,000 property? Or why a gorgeous property can seem to have everything going for it, but it’s worth far less than you thought it would be? I have, and I figured other investors have too, especially those who are new to real estate.
Here’s what I know about this subject: A property’s value is determined by a LOT of different factors. Some of these you would expect, but others may come as more of a surprise. Here are some of the main factors that influence a property’s value – some of which are in your control and some which aren’t.
This one is definitely outside of your control, and it’s a pretty major determining factor for value. There’s a reason that old saying, “location, location, location” exists, and it’s because location really is the #1 driver of value. You could have the world’s most beautiful home, but if it’s in the middle of the inner city, it’s not going to be worth nearly as much as it would if it were located in an affluent suburb. The reverse is true too; even if a property is in poor condition, if it’s in a desirable area, it’s still gota lot of value. Crime rate, schools, and overall cleanliness of the neighborhood also play a role.
Home values are also driven by supply and demand in the local market. This is basic economics. If there’s a large inventory of homes available and not enough demand, the values will be lower. However, if inventory is tight and demand for homes is high, prices will skyrocket. You can see this happening in a lot of growing cities right now, too. Kansas City, where the turnkey market is especially hot, is just one example of ametropolitan areaexperiencing increased home values due to low supply and increased demand.
Historical Sales Prices
When valuing a home, the historical sales price of the property and surrounding properties is also considered. Let’s say a house has been sold a couple times over the last 10 years. An agent is going to look at those sales prices and how they fluctuated, as well as the price trends for neighboring homes. This will help give them a more accurate picture of a home’s worth, and thus be able to place a fair value on it.
Generally speaking, the bigger the home and the better the condition it’s in, the more it will be worth. A well-maintained home that’s been updated is going to be worth a lot more than an outdated property in poor condition. There’s something to be said for extra bedrooms and bathrooms, as well. These will definitely bump up a property’s price tag, but you do have to consider the demand that exists for different-sized homes. The gold standard for most people is 3-bedroom, 2-bathroom. Anything less than this, and the value will be much lower as these smaller homes are not in high demand in most markets, and therefore cannot command higher asking prices.
Finally, amenities both at the property and nearby also affect the overall value. Having a great outdoor space, fenced-in yard, security system, and “smart” technology can improve value as these are features that buyers are interested in. The same goes for amenities that can be found within close proximity to the property, like parks and restaurants. Another feature that can add a lot of value is how much privacy the property affords the owner. Most people are willing to pay more for a property with mature trees and other elements that add a sense of privacy.
The various factors that influence property value make up a complex formula that changes from market to market. However, the ones listed above are generally factored in no matter where you are. Each plays an important part in determining the overall value of a piece of property, and keeping them in mind as you look for new investments can help you decide if a property is worth it or not. Call me for a free consultation today, and we can go over your homes value!
Author:Christina Strickland Phone: 937-302-8576 Dated: May 2nd 2018 Views: 167 About Christina: Christina Strickland joins Plum Tree Realty as a Realtor. I truly enjoy my chosen career and hope ...
View our latest blog posts in your RSS reader. Click here to access.
A word from Chris Russell, CEO of Plum Tree Realty:
"One of my greatest passions is to use our real estate business to help alleviate suffering in this world. So we take proceeds from Plum Tree to help orphans, feed the hungry, heal the sick and hurting, and to aid the homeless ... both in the States and abroad. We are not about "getting rich." We are about making a difference. So when you do business with Plum Tree Realty, you can know that a portion of your money is going toward helping those on this planet who are in need of help. Together we can make a difference!"
To help people realize their dreams in home ownership and real estate investing through the highest levels of broker services at the most affordable prices available.
Our Core Values:
Integrity in every relationship, decision, and transaction.
Truth in word and deed.
Hard work that keeps us ahead of the competition.
Sacrifice of our own interests for the gain of our clients.
Commitment to excellence in every task we perform.
Respect for all people.
Giving to those with whom we work.
Areas of Expertise:
Residential Real Estate Sales and Purchase
Commercial Real Estate Sales, Purchase and Leasing
Real Estate Investing (buying, selling, holding, rehabbing)
Property Management and Leasing
Putting it Together
Plum Tree Realty is a premier real estate marketing company focused on helping buyers and sellers get the highest level of real estate services. We help home owners, for instance, who have homes for sale in Mason, Ohio to price their homes in a competitive way since the market is growing in such a fast rate in that area. When a buyer is looking for West Chester, Ohio real estate for sale, we can guide them to the very best deals that are available, and we can give them expert advice as they make such a huge purchase. We cover all of the major real estate markets of the Greater Cincinnati including the following hot markets:
Cincinnati, OH Real Estate (homes for sale)
West Chester, OH Real Estate (homes for sale)
Madeira, OH Real Estate (homes for sale)
Monroe, OH Real Estate (homes for sale)
Indian Hill, OH Real Estate (homes for sale)
Hyde Park, OH Real Estate (homes for sale)
Blue Ash, OH Real Estate (homes for sale)
Lebanon, OH Real Estate (homes for sale)
Loveland, OH Real Estate (homes for sale)
Fairfield, OH Real Estate (homes for sale)
Hamilton, OH Real Estate (homes for sale)
Liberty Township, OH Real Estate (homes for sale)
Kenwood, OH Real Estate (homes for sale)
Mount Adams, OH Real Estate (homes for sale)
While some people search for homes according to the suburb names, others are very interested in the top school districts in the area such as homes for sale in Mason School District, homes for sale in the Lakota School District, homes for sale in the Wyoming school district, homes for sale in the Sycamore school district, homes for sale in the Monroe School District, and more. Our agents are highly-skilled in placing families in the best school districts in Cincinnati according to the desires of each family involved.
Of course, we also have great skill in helping buyers and investors find foreclosures, short sales, bank owned homes, and other great investment properties in the Greater Cincinnati Metro Area as well. Many of our agents are investors themselves, so they are great at helping other investors be the first one to the "golden egg."
We also have agents who specialize in helping families who are relocating to Cincinnati, Mason, West Chester, Blue Ash, Madeira, and any of the other regions in Southwest Ohio. It's great to have "feet on the ground" when you are looking to make such a move.
Plum Tree Realty has also become quite a favorite company for those who like to try to sell their home as a For Sale By Owner in Cincinnati as well. The reason for this is that we offer a $500 flat-fee listing to home owners who would like to sell as a FSBO, but they would also like to have a presence on the Cincinnati MLS search for homes for sale. Most FSBOs miss that exposure, but for just $500, we can help them get listed on the Cincinnati MLS and find buyers at the speed of ... the internet!
While most brokerages feel they have the best agents in Cincinnati, we truly believe that we are at the top. Many larger companies like Sibcy Cline, Remax (RE/MAX), Coldwell Banker West Shell, Comey & Shepherd, and others are at a size that makes it difficult for them to react to the markets and changing times at a great speed. Since Plum Tree is smaller, we are able to respond to market conditions rapidly and efficiently which gives us a disting market advantage. Remember: "It's not the big who eat the small; it's the FAST who eat the SLOW!"
Things to Consider When Buying a HomeLocation, location, location!&nbs
"We have purchased 2 homes with Plum Tree Realty. We initially found Chris Russell prior to having even visited Cincinnati. He sent us many MLS's and we found our home while on our pre-move vacation in Japan. I probably looked at 15 or 20 houses with Chris on a few occasions. He coordinated the viewings well. He knew about the neighborhoods and which ones were being updated and selling for more. He gave me space to form my own opinion about the house, but if I specifically asked, he would lend his expertise. As first-time home buyers, we were very uneasy about the process. We would ask a ton of questions just to truly understand. Chris was very patient with that. He helped us through the negotiation process and helped explain the titling process when it overlapped with the deal. We closed in record time! We found the house and negotiated the deal within a week of moving to the area and were moving in 5 weeks later. When we went to buy our first rental property, I reached out to Chris and he referred me to one of his realtors who took great care of us. I don't doubt that the rest of the Plum Tree team has just as much integrity and professionalism as Chris and Mike."