If you’re a homeowner, keeping tabs on your property’s value is important – whether you’re considering refinancing, selling, or just looking to build equity.
In this handy guide, we’ll explore the different types of property values, factors that influence your home’s value, and tips on how to improve it. So, let’s get started.
Different types of property values
Before diving into specific valuations, it’s important to understand that there are several ways to assess your home’s value. Each type serves a different purpose and may produce different results.
Here are three common valuation methods:
- Market value: This is the estimated amount your home would fetch on the open market. It’s determined by comparing your property to recently sold homes in your area with similar features and conditions. To get started, visit websites like homes.co.nz or QV.co.nz.
- Rateable value (RV): In New Zealand, the RV is the value assigned by your local council for calculating the payable property rates. Contrary to what many people think, this is not an accurate measure of a property’s value. It’s just an estimate of your home’s worth at a specific point in time and, usually only being updated every three years, it may not always reflect its current market value.
- Appraised value: If you’re looking for a more accurate estimate, the appraised value is a professional opinion of your property’s worth, typically provided by a licensed property valuer or a real estate agent. They’ll consider factors such as location, property condition, and recent sales data.
Of course, none of these methods can tell you exactly how much your home would sell for, if you put it on the market today. Remember: at the end of the day, a property is worth only what a buyer is prepared to pay – which can depend on a number of factors.
Factors influencing your home’s value
A variety of factors can impact your home’s value, some of which are under your control, while others depend on external conditions. For example:
- Location: Proximity to amenities, schools, public transport, and local attractions can significantly affect a property’s desirability and value.
- Property size and condition: Larger homes with more bedrooms or bathrooms typically have higher values. However, the overall condition of the property plays a crucial role as well.
- Market trends: The overall health of the housing market, interest rates, and economic factors can all influence property values.
Understanding these factors can help you make informed decisions about your property and identify areas where you can add value. And on this note, let’s look at some tips for improving your home’s value.
How to boost your home’s worth (and why)
Does your home need a spruce up? Improving your home’s value can help you build equity or maximise the property price when selling. However, it’s crucial to choose the right improvements that will yield the best return on your investment.
Here are some tips to consider:
- Regular maintenance: Keep your home in good condition by addressing any issues promptly, such as leaky roofs, plumbing problems, or structural concerns.
- Renovations and upgrades: In some cases, updating kitchens, bathrooms, or adding energy-efficient features can make your property more attractive to potential buyers and increase its value. But it’s a good idea to ask a property valuer which upgrades are most likely to deliver a better ROI.
- Curb appeal: To create a positive first impression, consider enhancing your home’s exterior with landscaping, fresh paint, or other improvements.
These are just a few examples, of course. The key thing is to make strategic improvements to your property, so consider consulting a professional property valuer and a real estate agent before spending any money.
What does your mortgage have to do with it?
Understanding your home’s value is crucial when considering refinancing options or tapping into your home’s equity for renovations or investments. For example, a higher property value could allow you to access additional funds through home equity loans or lines of credit. And if you’re looking at buying your next home, it may boost your property opportunities.
Like to know more? Get in touch – as mortgage advisers, we’re here to help.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.