5 vital factors that determine the value of real estate

Factors that determine the value of Real Estate

The real estate industry is one of the fastest growing sectors across the world. The international real estate market as well is grabbing eyes. The factors that have contributed to the boom of the real estate industry are common throughout the world.

We have mentioned some primary factors that affect the value of real estate. Please leave your thoughts behind in the comments section below.

Let’s read on:

  1. Location

Location is the king in the real estate industry. The price of a property (residential or commercial) is based primarily on its location. This statement stands true for properties all throughout the world. Better location calls for higher prices of the properties.

2. Demand and supply

Another factor that affects the value of real estate is its demand and supply. In one of our articles, we explained how an imperfect balance between demand and supply has affected the property prices in India. The relation between demand and supply is the most influential factors in deciding the price of a product or a service.

  • Type of property

The demand and supply status of real estate properties affect their value like nothing else. The type of property in demand always sales at the best of the price. For example, a residential complex in a commercial area would not call for a wide customer base.

  • Investment potential

In the same lines of demand and supply, investment potential plays a significant role as well.

We can view investment potential from two angles. The first one refers to the investment potential of the population. The second angle introspects the scope of investment property (residential or commercial) offers. A property which offers significant scope for the future is always in demand.

  • Renovation potential

On similar lines, renovation potential plays as much the same role as investment potential. A renovated property has much higher demand in the sales market than a non-renovated property. Under such circumstances, buyers shy away from investing in houses that have no scope of renovation.

BONUS

Size and facilities

Another by-product of market demand is the sizes and facilities provided. Demand mostly depends on demographics and location. So if the size and facilities of a property do not comply with the same, the value is affected.

To read more blogs related to real estate, click here and here.

Picture Courtesy- Pixabay

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