As a homeowner, knowing the value of your home will help prepare you to buy, sell, or refinance your home. It can also provide a picture of your overall financial health. The factors that determine the value of your home are as diverse and individualized as the homes themselves. In addition, those same factors may vary by neighborhood, depending on the house’s location and price range. A $220k home in a rural area will probably have different factors impacting its value than a $220k home in an urban area. So, how can you get a better idea of how much your own home is worth? Let’s look at the factors that determine your home value.
The location of your home is a key factor in determining its value. It is not just about the neighborhood, but also about how close you are to amenities like parks, shopping, schools, and transportation. Here are a few things to think about when considering location.
- School district – The quality of local public schools can greatly affect the value of homes within that district. Some families will not move to a neighborhood where the quality of local schools is not up to the standards they want for their kids’ education.
- Local economy – The strength of the local economy directly impacts real estate prices. A strong economy may mean more people are moving into town and buying homes, while a weak economy could mean fewer people moving in and less demand for housing.
- Renters vs. homeownership rates – If more renters than homeowners live in an area, it could impact property values. Homeowners tend to be invested in their communities, while renters are not as involved since they do not own their homes or have any equity in them. This lack of investment from renters can negatively affect property values over time if too many renters move into an area without contributing to community activities or civic organizations as do homeowners.
- Neighborhood – The number of homes on the market in your neighborhood can have a significant impact on your home’s value. If many nearby houses are for sale, it can drive down your price. However, if not many nearby houses are for sale and yours is the exception, it may increase its value.
Condition Of Your Home
Another important factor to consider is the condition of your home. A well-maintained home will always be worth more than a neglected one, but knowing which repairs and maintenance are most important can be difficult. It is easy to get overwhelmed by all the things your house needs, so prioritize appropriately.
To determine how much money you can expect when selling your home, have a professional appraiser inspect it first. An appraiser will tell you what it is worth based on factors like location and other amenities nearby (like restaurants or parks), as well as structural issues such as plumbing problems or cracks in walls that could cause issues in the future if left unchecked.
Size And Layout Of Your Home
The size and layout of your home are two important factors that determine its value. The more square footage you have, the more valuable your house will be. A big house is also likely to cost more than a smaller one.
It is no secret that having enough bathrooms helps keep things running smoothly in any household. For example, if your house has five bedrooms, but only one bathroom, it will not sell for as much as a similarly sized house with four bedrooms and two bathrooms.
Upgrades and Updates
Updates are different from upgrades. Updates are more cosmetic, while upgrades are structural. Upgrades can be very expensive and may not add as much to the resale value as you would expect. Likewise, some updates might add more value than others do. For instance, an upgraded kitchen will likely command more money than a new coat of paint on your front door or new carpeting in your living room. In general, if you are looking to make an expensive change to your home’s interior or exterior, it is best to consult with experts before making any decisions about what type of upgrades will increase the value of your home.
Energy Efficient Features
When it comes to the value of energy-efficient features, there’s no doubt that they are worth their weight in gold. A home with energy-efficient features (such as good insulation, efficient appliances, water-saving fixtures, and tight construction) can provide substantial savings on your monthly utilities.
Age and Amenities
Another factor that determines a home’s value is its age and amenities. Newer homes are typically valued higher than older ones. When it comes to amenities, having updated modern ones can make a difference in your home’s price point. If your neighborhood doesn’t have sidewalks or streetlights, this could negatively impact the value of your property because it will not be comparable when trying to sell or rent out your place later.
If there are houses within walking distance that offer similar size yards as yours but also feature new appliances and flooring (or even just granite countertops), those houses will probably be worth more than yours because they will appeal more to potential buyers.
The Bottom Line
Although these factors play a key role in the value of your home, the only way to know how much your home is worth is to get an appraisal. Contact a local real estate agent to get started, so you can feel empowered with knowledge about your home’s value.