Things that Hurt a Residential Property Investment’s Potential

residential-investment-property-ukA residential property investment may be made of steel and concrete and other sturdy materials but it’s still volatile and sensitive just not in the most literal sense.

The real estate industry is affected by various factors and their combinations. It can be good or bad and sometimes so significantly moving that they can drastically pull up or drag down an asset’s value.

We’ve all heard of the various means by which investors, owners and landlords can improve their residential property’s value in the market but how about the things that can drag it down? That’s what we’ll be discussing today.

  • Negligence – Lack of adequate and timely repairs and maintenance can easily devalue a residential property. Simply put, this hastens the wear and tear process. Just because the house looks fine doesn’t mean it is. Look beyond the surface too.
  • Procrastination – Don’t put off repairs or improvements for later no matter how small or seemingly harmless they appear to be. Remember that smaller problems are easier to solve. Don’t wait until they aggravate.
  • Economy – This one is one of those factors that owners can rarely do something about. When the economy is slow, it’s likely that homes reduce in value due to the decrease in demand.
  • Danger – Safety and security are very important aspects when choosing properties to invest in so the lack thereof or threats against it will surely reduce the numbers. Danger can mean many things such as crime rate, location or likely occurrence of natural disasters.
  • Weather – When the residential property is situated in such a way that it often gets struck by natural disasters like typhoons, floods and forest fires or suffer from extreme weather conditions for the majority of the year (e.g. too cold, too rainy or too hot), market values tend to go down as well.
  • Neighborhood – Neighbors, whether likewise residential or commercial, can likewise affect a property. Nosy, noisy and bad neighbors tend to suck the life out of any asset, finance-wise. Why? They drive away demand.
  • Defect – Last but not the least, defects or poor functionality of a residential property investment will hurt its potential. This brings us back to the topic of negligence and procrastination. The gravity of the defect will also affect the severity in value decline. Some flaws may be easily fixed while others will cost significantly especially if they pertain to major aspects of the house.

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