Did you know - Factors that affect the value of your property

About a month back i had written my first blog on some tips that might come handy for all the people searching for their dream home.In this new post i will list out some factors that affect value of your property over a period of time and needs due consideration if one is looking at it from an investment point of view.A lot of statistical data is presented from an excellent articled published in Economic Times earlier.

 Let me start off with this quote:

 “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”
-Franklin D Roosevelt

If you are buying a house to resell it after few years then it is imperative that you consider the factors that affect its appreciation over a period of time.As mentioned,a bit of common sense as well as caution can help you make a good fortune for yourself.

The first and foremost factor to consider is the location of your property.It is arguably the most important factor that determines how much the value of the property will appreciate over the time.A location in the heart of the city, near the working hub of the city or even near scenic beauties such as sea, lakes are known to command a higher value than the rest.People don't mind paying slightly higher rent if the flat is close to their workplace.In fact the exact location of the house within an area further affects its resale value.A sea facing flat in Mumbai suburb will definitely have a higher value than the non sea facing flats even in the same building.The same rule applies on the flats in large housing societies where a flat overlooking  amenities such as swimming pool or landscape garden demands for higher rent or resale value than a non-amenity facing flat.Further corner flats are preferential to some since the flat will have better ventilation that the rest of the flats.Thus,it can be seen that the location of your property is of utmost importance and must be considered sagaciously.

                  The next factor to consider after location is the connectivity.A flat in a location with good public transport is always popular among people looking for resale property or apartments on rent .Also,proximity to a railway station or an airport further adds value to your property.The thing to look out here is that it should not be too close to them since then the noise and other factors can be a deterrent for future buyers.A flat that has schools,colleges,multiplexes,restaurants,market areas,malls,hospitals in its vicinity is also bound to appreciate in value consistently.A good location combined with good connectivity is a great combination to have and is bound to attract a lot of people in the future as prospective buyers.

                  Another factor that comes to my mind is the Infrastructure in the nearby area.Any major  infrastructure projects scheduled to come up in the future can increase the value of all the nearby areas and  become a part of the USP for the developers and property owners.The point to note here is that you should always be aware on any major infrastructure developments in your city if you are looking to invest in real estate.Investing at the right time in a property can fetch you returns more than any other investment options.Buying in a location,from an investment point of view,that does not have much scope for infrastructure development  is not fruitful.On the other hand an upcoming retail chain,a large scale government or corporate house infrastructure project can surge the demand for property in the nearby areas and subsequently the property rates in those areas.

                  Further,quality of the building and the quality of the house affects the current value of your asset.Both of these complement one another.A poor state of the building can put off a lot of buyers even though the flat may be well maintained.Similarly even though the flat may be in a lavish society with state of the art amenities,it cannot attract buyers if it is not maintained.An occasional renovation or a revamp can not only help you with higher value and better price for your property,it further improves your negotiation power.If a buyer believes that he will have to spend money to overhaul the house,he will pitch a lower offer or keep looking for a ready to move in home.

                 There are other minor factors that may also come into play besides the ones mentioned above.In case of realty,size matters a lot.It may be difficult to find a lot of buyers if the size of the property is either extremely large or small.Usually 2-3 bedroom houses are the ones with the highest demand.If the flat is in a housing society with designated security,parking space,recreational facilities,you can expect to find a lot of takers for it.

                To sum it all up there are a lot of things that you have to consider if you are considering real estate as an investment option.All the factors mentioned above complement one another.A good location combined with good connectivity is the ideal combination you should be looking at,but then the question pops up as to how much can we expect such an investment to appreciate since it will command much higher investment in the first place.Thus it is more important to consider all the factors and determine which ones work for you.I will like to mention one such case that i read about in Economic Times:
"Anand purchased a property in Mumbai suburbs for a rate that was about 30% less than the prevailing market rate since the flat was overlooking a huge dumping ground and had very few takers.But soon the state government shifted the dumping ground and built a park at the site.Such a change led to a rise in the demand for properties in the area and of course a spike in the property rates."
              If you are from Mumbai, you might be aware that there is a significant difference in the property rates between Bandra East and Bandra West : Bandra West is known for its heritage structures and the famous Mount Mary church.Also a lot of properties overlook the sea in Bandra East.Similarly property rates  in areas such as Koregaon Park,Aundh ,Baner are much higher in Pune due to a number of factors mentioned above.
           I firmly believe in the quote "The best investment on the earth is earth".The real estate is an imperishable asset ever increasing in value.I have never heard of prices of property going down in an area,barring a few exceptions.It is probably the most solid security that human ingenuity has devised,the basis of all security and about the only indestructible security.A shrewd approach to investment in real estate can help you achieve all your financial goals.

Hope this helps all you guys out there.Cheers!!!


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