When you purchase a property, the last thing you want to do is affect its value and make changes that will see your home depreciate when the time comes it sells up and move on. While you cannot help economic factors that affect the rise and fall of house prices, Portugal is currently seeing house prices rising, and they have jumped an average of 6.5% over the last 12 months; you can affect the value you add or detract from your property by the changes and alterations you make, or in some cases don't make.
But what exactly can influence the value of your home, and can you really avoid all negative aspects of property value? The last thing you should be doing is purchasing a house based on a hypothetical resale value alone. However, having this in mind can help you to make a good financial decision; knowing what can influence how much your home will be worth in the future can be eye-opening and be instrumental in making positive changes that allow you a good ROI should you sell up and move in in the future.
Read on for 10 factors influencing how much your home can fetch when it hits the market.
Neighbourhood
If you want to get a feel for maximum resale value, you need to look at the value of the other homes in the local area. Some areas have a maximum upper limit where people won't pay over a certain amount to live in a specific neighbourhood. Some neighbourhoods can have a negative effect on the resale value of your home.
Looking at the average sale price and length of time homes are on the market can give you an idea of what to expect in the future and how much money you should be looking to invest so as not to price yourself out of the market unless of course, you don't plan on moving.
However, under this umbrella, often known as neighbourhood comps, there are more defining factors that influence how much a property is worth. Proximity to schools, local transport links, square footage, the way the house is facing, if the home is on a busy road or is set back from the street, if you have vaulted ceilings for example, or a lot of outdoor space etc. Just because a home appears to be similar to yours, it doesn't necessarily mean it is the same.
While you cannot personally influence house prices in your local area, looking at the general property market can give you an idea of how much you will likely get upon losing your home.
Crime Rates
The crime rates in your local area will directly impact how much your home is likely to sell for. People want to know they're living in a safe neighbourhood. As such, if you are experiencing high crime rates, even if you aren't personally affected, you can potentially kiss goodbye to maximum resale prices.
You can go to Safe Communities Portugal to get an idea of the crime rates for your area and see how you compare to local districts or the national average, for example. While not a massive factor on its own, if you are in an area with high crime rates and are asking for the highest resale price for your home, this can impact how many offers you get and the length of time you are on the market.
Use this information to help you determine how much to set your home's price for, along with other factors, or to get an idea of how easy it might be to sell your home and who it might appeal to.
Home Upgrades or Lack Of
Not all upgrades or home updates can add value to a home, and any work you carry out needs to be carefully considered to help you get a good ROI on your investment and increase the comfort in your home so you're not adding in extras that aren't wanted by potential buyers or will bump the value of your home up past prices people are willing to pay.
But the same applies to not doing anything at all to your home so as not to lose money when you sell. At a minimum, you need to keep up with basic repairs and maintenance so your house is fit for purpose and safe for habitation by both your family and anyone who might reside there once you sell and move on.
Things like not getting a new roof once it's past its durability (typically around 15 years, depending on the style of roof and the materials it is constructed from) or treating dampness and subsidence can be detrimental to the quality of your home and its value. Getting new guttering from Clear Amber Shop, updating windows when they become worn and damaged, and maintaining any outdoor spaces are all things that homeowners need to keep on top of, as well as carrying out other repairs internally and externally too, i.e. removing flaky paintwork on the exterior of a home or removing rotted wooden features, repairing damage to flooring cabinets and so on.
More major work like building extensions, adding pools and similar upgrades can be nice to do if you don't plan on moving, but if there isn't any demand for this in your area, then it can simply be a waste of time and resources if you aren't making this your forever home.
Think carefully about the type of renovations you carry out, and make sure you keep on top of any wear and tear and home maintenance to ensure that you are keeping the home in a good state of repair and aren't making changes that will impact how easy it will be to sell should this become something you need to do.
Age
The age of your house will play an essential part in how much you can expect to get when put on the market. Depending on the area you live in, older homes can either increase or decrease the value.
Older homes that have not been adequately maintained and are in a state of disrepair aren't going to be able to sell for maximum resale value compared to homes of the same age that have been well maintained and even modernised to retain the character of the home while also ensuring it is fit for modern lifestyles with updated electric or plumbing. Personal preference will dictate how much a person is willing to pay for older-style homes as per their tastes, but the condition of an older home will sway its value either way.
Useable or Living Space
It doesn't matter how big your home is. If it is short on usable space it likely won't be reaching its full potential. In the real estate world where living spaces need to be maximised regardless of the size of the home; if your house has lots of space that is wasted or the layout is not well configured, this will be a big turn-off for some buyers.
Smaller homes with larger outdoor spaces can potentially be extended, making them more attractive. Still, areas such as garages, attics and unfinished basements that aren't habitable aren't counted, so these will decrease your square footage and usable living space unless they are refurbished to bring them up to livable standards.
Another aspect of livable space to think about is the number of bathrooms and bedrooms a property has. These are highly valued, and the more you have, along with a spacious, practical kitchen, the higher the value of your home will be. But it's also important to consider trends in your local area to get a feel for what buyers are looking for. This can be on a national or regional level. Look at what current homes on the market have room-wise and what is selling faster to get an idea of what might be in demand and where you are best-making changes if applicable.
There is no denying that many variables are involved in determining the value of a property, from economics to supply and demand, a property's age and condition, crime rates, and maximum property ceiling in any given area.
There is no way to determine ahead of time exactly what buyers will want should you happen to sell in the future. Still, there are things you can do, resources you can use and tips and tricks to employ to help you make the most of your home so you can not only enjoy living in it now but also ensure that you are not unintentionally detracting from the value.
Keep the property in a good state of repair, follow local trends for facilities and room usage in line with other homes in the area, and avoid making expensive changes that are not warranted, e.g. adding a pool to the landscaping if there is no demand in the area and be mindful about the level of finishes in your home to ensure it remains attractive through the years to any potential buyers.
