When buying a home, you want to know that its value will increase over time. Being able to calculate how much and how quickly a property will appreciate can be challenging. Below, we’ve shared some tips that first-time home buyers can use to estimate property appreciation.
Factors that Affect Property Appreciation
In general, real estate is viewed as a good investment because property values tend to appreciate over time. Nevertheless, many factors can affect a home’s ability to increase in value including:
- Location of the property
- Demand for homes in the area
- Inventory of available homes
- Improvements or upgrades made to the home
- The property’s overall condition
- The state of the housing market and the U.S. economy
Calculating How Much Your Home Will Appreciate
If you’re planning on buying your first home, something important to consider is how much it will be worth in the future. If your home increases in value, you could make a considerable profit and reap significant financial benefits. While there’s no way to know for certain what will happen in the future, there are strategies you can use to estimate property appreciation. Here are just a few:
Home Price History
Check to see how much the house has been appreciated already in prior years. Check what it sold for previously or was valued at 3-5 years ago. Compare these figures to today’s price. This will tell you the rate at which the home’s value has increased in the past.
Use Online Calculators
You can also estimate property appreciation with an online calculator. There are numerous free home appreciation calculators available online. You can simply plug in the home’s address, current value, expected annual appreciation rate, and number of years you want to estimate. Then, the calculator will give you the future appreciated value.
Neighborhood Home Values
You may also want to look up values of similar-sized homes sold recently in the same area. If those homes increased in value at a certain percentage per year, it’s likely your home value could grow at the same rate.
Consider Home Improvements
Remember – updates and renovations also boost home value. Factor in any upgrades or improvements you’re planning on undertaking that would cause your home’s value to appreciate faster.
Contact Us for First Time Home Buyer Advice
If you’re having trouble estimating the future value of a property or would like to discuss home appreciation in detail, please do not hesitate to contact us. At Mortgage Solutions Financial, we love working with first-time home buyers. Call today to speak to an expert!
