Like always, real estate investments have been proven to be one of the safest and most stable investments in comparison to other assets like stocks. Whether you wish to invest in the long term or short term, real estate is always considered a fruitful asset in your investment portfolio. Property is one of those assets that can offer you a return that is much higher than the inflation rate.
However, only a certain part of the population manages to invest in the real estate market. Only some can understand how the real estate market works and what really contributes to property price appreciation in the real estate market. So, if you are new to the property investment market and don't know much about property price appreciation, then this article is for you! Make sure to read the complete article thoroughly for better understanding.
Let's begin with the meaning first!
Meaning of Property Price Appreciation
The term "Price Appreciation" is a combination of two words, i.e., Price and Appreciation. The first term refers to the value in terms of money, whereas the latter means increase. So, when combined, Price Appreciation in the property market refers to the increase in the value of real estate property over a period of time. One of the major goals of investing in real estate is to get a higher return on investment, and this goal of the investor is fulfilled when an investor sells the property at a high price in the future.
The Price Appreciation of a property usually depends on a variety of factors that involves location, future development plans, demand and supply of the property in the specific location, and much more. Besides this, the owner of the property can also force price appreciation of their real estate properties by carrying out renovations and repairs on the property. In fact, you will be surprised to know that some investors purchase the property with the main aim of selling it later when the supply in the real estate market is low. The reason behind this is that investors want to benefit from the property's price appreciation.
In a nutshell, Property Price Appreciation in the real estate segment pertains to how much the value of a property will increase over time. Therefore, when investing in a property, appreciation should be on top of your mind. Price Appreciation can highly influence how much profit one can make from it when you put your property up for sale in the future.
Top factors responsible for Property Price Appreciation
Whether you are investing in condos or any other kind of property, here are some of the top factors that are highly responsible for Property Price Appreciation
1. Ease of accessibility
propertieswith proximity to offices, business districts, shopping malls, entertainment centres, schools, medical facilities, expressways, and modes of transportation generally rate and appreciate higher. In contrast, the real estate properties located far away from all such facilities usually rate lower. Moreover, such properties generally include those that do not offer the same facilities to the tenants or homeowners.
2. Location and neighbourhood
The most common piece of advice that you will always hear while choosing a property is to buy one that is in a good location. A good location particularly refers to the neighbourhood that is close to basic amenities. Parks, quality schools, proximity to main roads, etc., are some of the main things that can increase the value of a property. In addition, the upcoming infrastructures around the neighbourhood like retail shops and public infrastructures can also account for Property Price Appreciation.
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3. Reputation of property developer
The reputation of the property developer has a great impact on the value of the property. Residential and commercial properties built by reputed developers have better design and quality than others. Thus, the resale value of such properties tends to be higher. Additionally, the excellent record and reputation of the developer in the real estate market can attract more demand for their projects, especially if the property is located within a good location and integrated with great amenities.
4. Features and quality of development
What makes a residential property great? Well, it's the features! The real estate properties built with the requirements of the homeowners in mind are the first choice of prospective buyers. For instance, the safety and security protocols integrated into a real estate development, the construction and layout of the property, facilities available, etc. The better the features and amenities, the higher the property's value will be.
5. Demand and supply
Lastly, the market conditions significantly affect the value of a property. For example, if the real estate properties are in high demand in a specific location and only a few of them are available for sale, in that case, the value of the property will increase. Similarly, the price of the property will go down if the local demand is low, but other properties are available for sale. In fact, an excellent way for investors to survive downturns is to search for properties that have an established demand irrespective of the circumstances.
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That's all! In the end, we would like to tell you that some property investors fail to see the risks associated with real estate investments due to a lack of knowledge and research. With real estate, it takes time to see significant returns, and that's why you should be patient while investing. So, what are you waiting for? Start investing in real estate today by getting in touch with Clicbrics, and we are sure that the benefits of Property Price Appreciation will satisfy you!