How to Know if a Home Will Appreciate

Not all homes out there appreciate the same. Here’s what you can do in order to find a good one. If you’re currently trying to predict home appreciation, then we have some good news and some bad news for you. Starting off, there is no guaranteed way for you to determine exactly how much the home you buy will appreciate. You can go online and find home appreciation calculators, but every property’s situation is going to be unique, making it hard to determine. It would be best that you do not take those automated results to heart. Fortunately, there are some signs to look for that indicate the properly is likely to go up in value (appreciate) over time.

Good Signs for Home Appreciation

·         It’s in a good location.

You may have heard it time and time again and it really is a real estate cliché, but location really matters. If you find a home that is located somewhere people would love to live, and where people are going to continue to live, then this is a good sign for home appreciation.

A great location could be numerous things. For example:

-          A neighborhood that is located in a top school district and has nearby local schools

-          An up-and-coming neighborhood

-          An area that is scheduled for serious development

·         It’s a smaller sized home.

It may seem counterintuitive saying smaller homes appreciate more, but it’s all a matter of math. Let’s say there are two homes located in the same neighborhood and they both have similar plots of land – they are likely to appreciate by the same amount, regardless of the size.

·         The property has value on its own.

Property is where the majority of real estate value is nesting. Land appreciates more reliability than the buildings that are sitting on it. This makes sense, because buildings age and they can get run down, but the land doesn’t. This is why certain types of properties, like waterfront for example, have a tendency to have better home appreciation, regardless of what sort of structure it has.

·         The home could use some work.

The important words to pay attention to here are “a bit” Regardless of who you are, house flipping is a risky business to get into due to the fact that major fixer-uppers have a tendency to have some surprises attached to them. Homes that need a little bit of work that can be done over time have a tendency to rack up a better return on investment. On the other hand, a home that was just newly built is going to come to you in top shape, which doesn’t leave a whole lot of room for improvement.

·         The local housing market is strong.

Some local housing markets out there get hot, and then they cool off with no warning. Others have a strong market over time relative to others. These places are usually close to dependable employers such as major universities.

If you’re thinking about maximizing those returns, then you may want to look into a fixer-upper. Yes, this can be a gamble, but many times, homes that are in need of some work can turn into a big deal.