Nationwide, many factors play a role in affecting the value of your home and its depreciation. The economic climate, home’s location, square footage, and the number of bedrooms and bathrooms may all have an effect on how your home depreciates.
Although several of the above aren’t easily changed, some are under a homeowner’s control.
Completing repairs and renovations can help to a certain extent. As your home is likely your most valuable asset, is it up to you (the homeowner) to understand how to protect it. Letting your property slip into disrepair is a guaranteed way to decrease its value. It is very important that you are aware of how you’re affecting your home’s value and what can be done to raise it back up if it does drop.
What can cause a Home to Depreciate?
Physical Condition
The physical condition of your home is very important when discussing home value and depreciation. Aging properties decline in value when household items become used or need replacement.
To keep your home’s value from depreciating you need to regularly tend to its physical condition. Even simple neglect can add up and cause a home to lose value.
Fortunately, it is completely possible for a homeowner to not only stop their home’s depreciation but actually raise the value of the home by making needed repairs, undergoing remodeling projects and simply keeping up on the property’s appearance.
You can preserve property values by completing routine maintenance and repairs as needed.
Ultimately the value you gain or lose based on your home’s physical appearance is up to you. Damage to your home caused by insect infestation, fire or adverse weather, or structural problems WILL devalue the property.
Your curb appeal may also affect the value of your property. When the style of your home becomes outdated it becomes undesirable to new buyers. This will affect its depreciation.
More on curb appeal
When you pull up to someone’s home what’s one of the first thing that catches the eye? The yard and the appearance of the property, most likely. Many real estate professionals agree strong curb appeal is an essential factor to consider when calculating your home’s value.
The paint color of your home plays a big part in curb appeal as well. Old, worn, or chipping paint can wreck havoc on your home’s value. The same goes for a poorly maintained yard. Paint that’s faded or outdated/no yard maintenance will play direct roles in your property’s value dropping.
If you decide to paint your home a fresh color, it is good practice to use neutral colors because of their wide use. Neutral colors include brown, beige, white, and grays.
About your yard….
Lots of plants do not always equate to higher home value. If you’re looking to sell your property for the highest possible amount, remember buyers may be looking to avoid high-maintenance vegetation especially plants that make a mess and have the possibility of drawing complaints from neighbors.
NOTE: If your home needs serious repairs, its value is likely resting on those repairs being completed. If you have a leaky roof, plumbing problems, or a malfunctioning HVAC (heating, ventilation, air conditioning) system you will have to make some serious decisions to preserve your property’s value.
Neighborhood
Location matters when determining property value and future depreciation. The surrounding neighborhoods, businesses, and local events will have an effect on any property’s worth. If you have purchased a home in a spurned neighborhood, your property’s value can depreciate regardless of its condition. Airports or railroad tracks contribute considerably to noise pollution that can devalue your home. Even the conduct of those in the neighborhood can cause the value to drop.
Shrewd homebuyers should thoroughly consider neighborhood conditions before purchasing.
Understanding your neighborhood is extremely important when attempting to measure the future value of your home. Take a close look at noisy neighbors, poor neighborhoods, poor schools, and local transportation hubs before deciding to buy. Research is key.
Economic Factors
Home values can fluctuate in a time of a depressed economy or if supply-demand for homes has become unbalanced. When money is limited and buyers are few, home values may decrease: regardless of a home’s physical condition or location.
If you find yourself in a poor economic climate you may choose to hold on to the property. Waiting for favorable market conditions can seriously improve the value of your home and the amount it can sell for.
Comparable Listings
The housing market rises and falls. A flooded market can also lower the value of your home. When buyers have many homes to choose from, intense haggling and negotiating is almost guaranteed. The more competition local competition you have the less likely your home is going to stand out. This makes it very difficult for homeowners to get the exact value they calculated for their home.
