A property purchase is more than arranging housing finance and putting a down payment. Rather, it’s the tip of the iceberg. Making the rightful purchase requires you to be aware of the residence’s fair valuation. Is it too overpriced? If so, then why? Will it be worth your investment?
To answer such doubts, you must first know the various factors which affect real estate value. These will help you understand if the property you want is affordable and worthwhile.
Here are the top five factors influencing the value of residential property.
Location is one of the most significant factors affecting value of residential property, if not the biggest one. Properties located in well-developed neighbourhoods will usually cost you more than the ones in underdeveloped locations. Apart from the area, other factors influencing a property’s value include:
- How close it’s located to civic facilities such as recreational, entertainment, shopping, etc. centres, airports, and hospitals
- Employment opportunities
- Quality of the local infrastructure
- Security systems in the area
2. Surrounding infrastructure
Would you choose a housing unit without proper roads, bus stops, shops, etc., nearby? The answer is quite clear.
The surrounding civic and social infrastructure also affect the property price significantly. Thus, a property with airports, hospitals, schools, metros, malls, flyovers, etc., in the vicinity will have a higher value.
If such a property isn’t in your budget, don’t worry. You can opt for a home loan from a reliable lender and get the required funds to purchase your dream home.
3. Space and size
A residential property valuationis typically indicated by its price per square foot – the housing’s total sale price divided by its square footage. Say there’s a 2,000 square foot property priced at Rs. 36 lakhs. Then, the property’s cost per square foot would be Rs. 1,800.
This indicates that the bigger the property, the higher its value. In addition to the overall square footage, the number of liveable spaces like bedrooms and bathrooms also influences real estate cost.
4. Condition and age
A residence’s age and condition are also important factors for its valuation. Newer properties are usually worth more since they need no repairs and renovations. However, more than the age, it’s the condition of the property that matters the most. A decade-old property that is well-maintained can cost you just as much – sometimes even more – than a new one.
Finally, the property’s paperwork also affects its valuation. Documents such as Sale Deeds, Title Deeds, verifications, clearances, property tax receipts, build certificates, etc., prove a property’s legality. Thus, they are vital to the evaluation process. With these documents secured, a residential property will have a higher value than the one riddled with awaiting approvals and pending documentation.