7 Factors Affecting Real Estate Longevity

7 Factors that Affect Real Estate 's Longevity

When you are looking for a new home or beginning a home renovation, it is important that you understand the factors influencing the value of the real estate of your interest. This is necessary because most Filipinos are required to have a homebuyer’s loan or to refinance loans in the Philippines when commencing with home buying or renewal. Moreover, all providers of loans in the Philippines, whether they are specialist loan providers or banks, require a guarantee of repayment.

For the majority of homebuyers, purchasing real estate is an asset, which could be used to keep a roof over their heads, as an investment for resale, or to gain rental value in the future. No matter the purpose, you, as

However, it is vital for you, the loan holder, that the property doesn’t depreciate below the value of your loan. Banks and loan providers err on the side of caution when providing a home loan. This is done so that if the worst were to happen and the loan becomes left unpaid, they can be sure that through repossession of the property, full repayment of the loan can be ensured. To aid your decision-making process, listed below are a few factors that can affect the appreciation or depreciation of a real estate investment.

1. Location

Everyone has heard the axiom “location, location, location”, and the reason it is such a prevalent cliché is because there is truth behind it. Proximity to employment centers, medical facilities, shops, and schools is a determining factor for many families and young couples when buying a home. Proximity to a wide array of local amenities and good transport links increases the value of your potential property.

2. Geographical Stability

This is a condition specific to areas of geographical or geological instability. Areas that are prone to the effects of natural phenomena, such as flooding, tsunamis, earthquakes, or volcanic activity, are poor choices when buying property. You would be considering the aspect of your family’s safety, in addition to your loan viability and your insurance costs.

3. Age and

However, the condition of a property makes a huge difference. An old but well-maintained property can achieve a valuation that is the same as that of a new build of equivalent specifications; sometimes, even higher.

Keeping your potential property well-maintained will keep its value high. When you take out home loans in the Philippines, you should remember that the property must retain the level of valuation at the beginning of your loan, or a higher level of valuation.

4. Size and Improvements

The size of a home affects the initial value of the property. However, making poor renovation choices will cause your potential house to depreciate in value. Increasing the number of bedrooms and bathrooms is a good move to increase the value of your home, whereas removing walls and facilities or reducing the number of bedrooms is not.

When you are approaching a provider of loans in the Philippines for a home improvement or refinancing package, you should address how much the modifications will increase the value of your potential or existing property. The benefit should be equal to or more than your