Properties in the real estate sector, whether land or developed assets such as apartments and houses, generally tend to appreciate with time. The pace at which such properties appreciate is dependent on several factors, including the national and regional economic growth. The value of a property at any given time is also affected by four characteristic factors as hereby explained.
The Location of the Property
A property’s location in reference to its environment has a direct effect upon the property’s net value and the average appreciation rate. In fact, real estate developers, when determining the value of properties, consider the property’s location as the primary factor. Properties that are located near major developments such as towns, infrastructures, and other social and economic advancements tend to be valued more. This is because of the convenience that the properties offer.
The Characteristic Size of the Property
The size of a real estate property directly affects its net worth. Real estate developments’ such as houses and apartments size is evaluated in terms of square footage while the land is assessed in terms of the acreage. Property developments’ net worth is directly proportional to the available square footage of living space and number of rooms, while land’s value is affected by both its size and shape.
Properties’ value is also affected by unforeseen and anticipated factors in the market. For example, if a property is prospected to attract further future developments, then it is highly likely to be valued highly. Properties in an area anticipated to be subjected to prospects such as commercial and municipal developments are highly lucrative and attract high prices.
In addition, the local authorities’ administrative directions regarding property developments in the area can also affect the prices. For instance, properties designated to undergo controlled and defined development will generally be valued more than those whose development is not controlled.
The local economy also has a direct influence on the net value of properties. If the economy is booming and money is flowing in the market well, then it is highly likely that properties will appreciate. High employment rates imply that the purchasing power of the locals will be greatly boosted; thereby influencing a rise in properties’ net worth.