How‌ ‌Locality‌ ‌and‌ ‌Other‌ ‌Factors‌‌ Influence‌ ‌Real‌ ‌Estate‌ ‌Value‌

Real estate seems like an easy playbook to master. Once they have enough savings, people often think about investing in real estate. Most people believe that by investing in just about any property, they’ll be securing their money. property in ibiza for sale

Although some people understand that not all properties are perfect and ripe for investment, some also have crazy expectations regarding the ROI.

For example, unless you buy a 2 BHK in Mulund, you can’t expect the same profit on a property located in remote areas. Similarly, great residential properties next to a slum or a remarkable commercial property in the middle of nowhere will bring about little to no profits. You will be saving your money, provided that the property doesn’t depreciate. But you won’t be getting any return on your investment.

So, let’s take a look at how locality and other factors end up influencing the value of all real estate:

Location Factors

Why does a house on the top of a hill in Malabar cost extremely high amounts of money whereas those atop Yeoor Hills in Thane don’t? Considering solely the location, they’re both situated on top of a hill.

The answer is proximity and accessibility. These are two very prominent factors that make a property’s location stand out. While proximity is the distance the location enjoys from the main city and its facilities, accessibility refers to how much people would have to travel in order to get to daily-life destinations.

For residential properties, fitness centres, parks, gyms, shopping centres, grocery stores, hospitals and institutions are essential. Tenants don’t like to travel through the entire city, they’d rather pick a place that has everything located close by.

Similarly, commercial property seekers would like the property to be near residential and commercial centres. In any remote area with no accessibility, the purpose and intent of setting up a retail shop, office or business make zero sense.

Supply and Demand

Basic economic principles of demand and supply also apply to real estate properties. Across the city, if there is a lot of stock in the inventories, the demand is bound to be low. Investing in such a time would be futile as not a lot of people are seeking to buy properties. Sellers would have a hard time negotiating the prices they want to sell their assets at.

Similarly, if you wait too long and the supply is running low, you’ll find yourself competing with many buyers. Although this is the ideal time for sellers who can have auctions for their property and sell to the highest bidder, it’s a buyer’s nightmare. Unless and until there’s an absolute guarantee that the ROI associated with the property is substantial enough to be considered, don’t risk it.

Smart investors wait for the ideal time when the supply and demand are at a stalemate. Future developments, political and social scenarios along with infrastructural changes are the factors you can bet on. Although this seems like putting everything to chance, however, if you’ve done your research, you’ll have much more confidence. That’s why big-time players are always tuning into current events and show a keen interest in political and infrastructural developments across the city.

Community Factors

Residential tenants want their housing unit to feel like home. That means the ideal property would need to have everything inside a specific neighbourhood or community. Along with the presence of community centres and the assurance of security, people prefer to be in a suburban environment. Being near the city doesn’t mean that people want the noise, air and traffic pollution to be right outside their house.

Apart from the interior of the property, tenants prefer neighbourhoods where their kids can play without worrying them. Considering how well the neighbourhood and community appeals to them, people are going to make up their mind before they even enter the house.

The Property

Lastly, the property itself is an influential factor in deciding whether or not it is a valuable asset. It’s easy to renovate a property regardless of where it is. That’s why buying up an old house in a demanded neighbourhood isn’t a bad choice. Not only can you sell it later for much bigger returns, but you can also demand high rents for it as well.

For a long time now, the trend of buying up old homes to renovate and sell out later has been a preferred investment. It’s always cheap to renovate a house and once everything is top-notch and shiny, you can take your asking prices to the roof as well.