Your home is likely to be one of the biggest investments you will make in your lifetime. This means that any depreciation in the value of a home makes a severe dent to your overall net worth. There are many factors that cause homes to depreciate in value. Some of these are entirely within our control while some are not. In this post, we will explore some of these factors and tell you what you can do about the factors that are within your control.
Physical Condition Of Your Home
The physical condition of a house is an obvious indicator of the value of a house. The more run-down and neglected a house appears, the less its value is likely to be. Not making repairs or neglecting simple things like tending to lawns and hedges can knock down the value of your home.
Sometimes, however, a home value can drop due to the design of the home becoming outdated. In this case, the owner can fix that by remodeling his or her house in order to make the design more current and in line with modern trends.
Location Of The House
This refers to the neighborhood in which the house is located. Just like a neglected house has an impact on its value, a bad neighborhood has an adverse effect on the value of the homes in it. Other location factors that can affect the value of a house are noise as would happen if the house is located near a loud factory, rising crime levels in a neighborhood, pollution and many other factors.
Before you invest in a home, check carefully to see the condition of the neighborhood and well as any planned developments in the future to get an idea of how the neighborhood will be in some years to come. It is advisable to work with a good realtor as they are great sources of information on future property trends in varying locations. If you have already bought the house, you can keep the value of your house up by aggressively following up on by-laws and zoning regulations.
If the house is in an area where there is some risk of damage (such as floods or factory contamination), it could have an impact on the value of the house. The house need not have suffered the anticipated catastrophe but just the fact that it could happen is often sufficient to knock down the value of such a home. The best way to mitigate against this is to do proper research before investing in any property to ensure that you understand all risks associated with the property.
This is one of the factors that are beyond the property owner’s control. When the economy is up and people have lots of money to spend, the value of the homes goes up. The reverse happens when the economy comes down. This means that regardless of how much your home is valued, you simply can’t find buyers to buy it at that price and therefore are forced to lower the price. The only reasonable way to protect yourself in such circumstances is to keep the property off the market until there is an upturn in the economy thus allowing you to sell at its right price
There are steps that a home owner can take to protect his or her home from depreciating in value. Even those under their direct control can be mitigated against. Working with a good property realtor such as NJLux real Estate can help you avoid most of these common issues. We are the leading realtors in the state of New Jersey and we know the luxury property market in New Jersey better than most. Talk to us today if you’re looking to buy or sell property in New Jersey.