When buying a home, you need to factor in the likelihood that it will increase in value because building home equity is one of the most important benefits of homeownership. Over time, you want to see the homes value grow so you can build up more and more equity.
There are many things that impact a homes value — square footage, size of the property, and quality of the construction — but numerous unconventional factors also play a role.
1. Number of Renters in the Neighborhood
A clear correlation exists between the number of rentals near the home and the value of a property. For condominiums, lenders want to make sure that only a small percentage of the units are rented because of the belief that too many renters can impact the property value. The same is true for single-family homes. A neighborhood can be considered less desirable if too many of the homes are rentals. Many people believe that renters will not take care of a property as much as a homeowner.
2. Located Near Power Lines
Everybody needs electricity, but visible power lines can have a negative impact on property values. One study found that power lines near a property could lower a homes value by as much as 30%. Some studies have shown a correlation between health effects and the proximity of power lines, and that has led some people to purchase a home not located near them. Plus, they can be considered an eyesore and not something somebody wants to see when looking out the window.
3. Located Near Train Tracks
Trains can be loud, and that is one of the main reasons they can have a negative impact on property values. A study found that a smaller home located near a train track was valued at between 5-7% less than a similar home not located near the train. Often times, the proximity of the train track factors into the listing price because real estate agents know that selling a property near a train track can be challenging.
4. Corner Lots
A corner lot is where two roads meet, and the property is located on the corner. For some buyers, a corner lot can be undesirable. People can be concerned that too much traffic will pass by the property when it is located on a corner lot. Also, privacy can be a concern. The increased traffic can mean that more people are looking at the house. In addition, corner lots often have strange configurations and are not formed like traditional square property lines.
5. Located Near an Airport
A property located near an airport can have a lower value for a variety of reasons. The most obvious is noise. Aircraft flying overhead produces a major amount of noise and makes the property less desirable. The other is zoning. Property near an airport is often zoned industrial or commercial so a lot of businesses could be located in the area. That could mean more commercial traffic. Finally, there are health concerns. Airports are associated with a higher level […]
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