"What is my house worth?" That's one of the questions I hear often as a realtor, real estate investor, and real estate coach. Sometimes there is an easy answer to this question, and sometimes it's not so cut and dry. There are a myriad of factors that contribute to this. And it's is going to take more than one post to address fully, but today, let's look at some of the factors that may ADD to the value of your house.
When asking the question "What is my house worth," people sometimes overlook the importance of land as an appreciating asset. What's an appreciating asset? It's an asset that grows over time. (The opposite would be a depreciating asset, or an asset that becomes less over time.)
What makes land an appreciating asset? Well, mainly this - the supply of land is never really expanding. And when you narrow it down to a specific geographical location, such as Appleton & The Fox Valley, you are looking at an even smaller amount of land. Why do you think so many farmers have cashed out in Wisconsin in past years? It's because cities and communities have grown, creating the need to expand outward, making agricultural land especially valuable as the suburbs grow outward. (The Milwaukee area is a great example of this Phenomenon.)
2. The Structure
Did you know that as a long term investment, a smaller home can actually be a better investment? For instance, if you own a smaller house in a desirable neighborhood, you may actually reap the rewards of appreciation more that you would if you owned a bigger house. Meaning: you probably bought your house for less than the person that owns the bigger home, but your home probably appreciated at the same rate based on the desirability of the neighborhood. Therefore, your percentage gain after selling the house could actually be higher. (This is something to think of for all you home investors out there, and underscores the age-old adage of location, location, location).
3. Plans for Future Development
If you live in an area that is adjacent to land, you may want to think of the impact that is going to have on the neighborhood over the long run. (For instance, having a multi-family condo go up in your neighborhood in 5 years might cause a depreciation of value and drive down the desirability of your neighborhood).
So again, it comes back to land. If your home is in an area where development is restricted by geography, or by the layout of the neighborhood, your home may be worth more.
4. The Pulse of the Neighborhood
Sometimes the "age" of the neighborhood can effect the value. For instance, a family buying a house is often attracted to a neighborhood with other small families, because it means friends for the kids, social time for the parents, and it often leads to greater amenities in and around the neighborhood. So factor in your "neighborhood age" as you try to put a value on your home.
As you can see, home values can be a complicated but important topic. Next week, we'll cover some things that can negatively impact the value of your home. Remember, a trustworthy realtor can often help you ascertain the true value of your home.
Asking yourself "What is my house worth in Appleton? Green Bay? Oshkosh or the Fox Valley? Give me a call! I can help you get the best value for your home....that's what I do!"