Land it is the main factor that drives real estate appreciation. As the more people look for homes, more properties are getting built. Thus, land becomes more limited and more expensive. External factors – zoning values, taxes, the economy – have dramatic impacts on land as well, affecting the rate it appreciates.
But physical characteristics – like the neighborhood it’s located in, home features, and layout – can increase the value of a home. Thus, home buyers should keep an eye out for these factors if they are aiming to buy a home that will appreciate for future resale purposes.
Every property’s situation is unique, so there isn’t just one way to determine how much a home will appreciate. While the market and appreciation rates can fluctuate, home buyers can look for these factors that help increase property value:
The property is in a great location.
It may seem like a cliche, but considering the location for a real estate purchase could be the most crucial factor in the entire process. It’s important to do research when choosing a city or neighborhood to move into. An area where there is high interest among home buyers is a good sign for home appreciation.
Spot an up-and-coming neighborhood by identifying what surrounds it. Look for schools, hospitals, and lifestyle areas. Consider as well any new infrastructure or real estate developments in the area that could attract more businesses and investments in the near future.
The property has room for upgrades.
Buying a brand new home means everything is clean, finished, and convenient. But it could also cost a fortune. Buying a home that has room for upgrades – minor ones like a paint update and new fixture installations – has benefits for the future.
For buyers whose aim is to buy at an affordable price and hope to sell higher someday, buying a home that can use some upgrades is better. They may not change the location, but they can definitely change the home.
The property has a flexible open plan.
Homes with open floor plans appreciate faster. Open plans offer a flexibility that can attract every type of buyer. It also adds to the modern features of a property, things that many millennial buyers – which compose a big segment of home buyers today – look for. Living rooms that lead out to the garden or a dining area that can easily access the kitchen are some features that can open plans allow.
The housing market is unpredictable. There are seasons when it gets hot then it plummets in a snap. But a home buyer can look at trends over time to find neighborhoods with strong, stable markets and houses with potential to appreciate. With the guidance of a real estate expert in their area, home buyers can find a home that meets their needs now – one that they can live in until they decide to resell. By that time, the home will have appreciated in value, ensuring a positive return on their investment.