Top 5 Factors that Influence Real Estate Prices
8 out of 10 millionaires have made their fortune by investing in real estate. This clearly shows that real estate provides high returns on investments. But there is a serious question one should ask; does every investor earn high profit? The simple answer is no because investing in real estate needs thorough market research. To get high profits, just read top 5 factors that influence real estate prices.
The most important factor that increases or decreases the value of a property is its location. There are many good and bad locations you should consider while buying a real estate. Good location makes the property desirable whereas bad location makes the property undesirable. A property with good location sells quickly as everyone wants to buy it.
Condition of economy
Economy has huge impact on real estate prices. Purchasing power increases when economy is booming and purchasing power decreases when economy crashes. At the same time people move to the areas where economy is booming as this increases property demand. In short booming economy is the sign of increasing property prices and declining economy is the sign of property price fall.
Property prices are correlated to central bank rates. When interest rate rises people sell real estate and deposit money in banks to get high profits on deposits. On the other hand when interest rate decreases people withdraw money from banks and buy real estate. So rising interest rate leads to property price fall but decreasing interest rate is the sign of rise in property prices.
Some investors know the magic to convert ordinary land into a gold mine. They earn high profit on investments as they thoroughly research the market. They buy property in the areas where government has planned infrastructure projects. With the completion of the projects, real estate prices of the area increases by many folds.
Successful real estate investors have no hearts but sharp minds. They know the type and size of property which has high demand. Most people want to live in 2-3 bedroom houses. A home with parking space, store and small garden sells quickly as buyers want these features. Therefore always check the property features before investing.