What factors can lower a property's value?
For many a person, buying a house is the largest investment they ever make. They purchase the home with the belief that it is an asset which will will always increase in value over time. Most people usually do not have a clue about the actual value, or the factors that can make it drop. The value of a property can fluctuate due to a number of circumstances, some of which may be way out of our hands. Here are some factors that can lower a property's value.
A Deteriorating Economy
If jobs are few in your local surrounding, and people are being laid off from their work, home ownership tends to decrease. People with no jobs will want to move in into cheaper houses so as to reduce their average monthly spending. This will result in a lot of vacant houses in your area. The owners of the houses will then reduce the house prices so as to stay relevant in the harsh economy. This will eventually reduce the value of the other surrounding homes.
The Condition of your House
Many people move into a new home and get into a comfort zone where they do not do any upgrades in their house. They even overlook the most basic maintenance processes. Over a long period of time, the house accumulates all sorts of damages that one can not fix even if they wanted to. This type of neglect greatly reduces the value of the house.
The Surrounding Environment
Initially when you bought the house, the environment was clean and free of pollution. People then started dumping their garbage on a nearby field that wasn't being used by anybody. Over time, this small field turned into a massive dump site, filling the environment with all sorts of garbage and dirt. This dump site will have a negative effect on the neighborhood by reducing the value of that estate. Nobody will want to live near such filth.
When people look for houses to live in, they often look for a safe and quiet environment where they can raise their families peacefully. If a company comes to such an environment and builds their factories near the houses, it will have a negative effect on the neighborhood. Factories come with all sorts of pollution from excessive noise to bad smells from their pipes and chimneys. Many people will flee the said estate in search of greener pastures, resulting in a drop of value for the surrounding property.
Mother nature is very unforgiving and can strike at any moment. A natural disaster like a tornado, wildfire, or mudslide can wipe out a whole neighborhood. An example of this is Hurricane Katrina, which destroyed thousands of property and left millions without a place to call their home. The area may even experience floods so bad that the whole town is considered as a flood zone. Even if your house survives any of these disasters, it will be very hard to convince someone to buy a house in an area prone to natural disasters.
Most estates are situated in such a way that houses are close to each other. Some of them even share boundaries like fences or walls. Living next to uncouth neighbors is not a very smart idea. These people make lots of noise and have parties until the wee hours of the night, especially if they are college kids. When you live in such a neighborhood and decide to shift, you will have a hard time convincing someone to buy you house, therefore will have to reduce its price.
Nowadays, the prices of real estate are crazy and are dependent on uncontrollable factors. If you want to maintain or even increase your property value, you will have to think and plan ahead to avoid these circumstances.