What Is the Value of My House?
One of the top questions on every real estate investors mind is how much their house is worth. Whether they are looking to sell now or not, you always want to see the value of your investment rise over time. The real estate market can be finicky at times, though, and the trend in value of homes in one particular location doesnít necessarily follow the trend for the rest of the nation.
Understanding the different aspects that go into determining the value of your house, and how you can boost the value of your house, is an essential component in building the most value in your property.
What Is Assessed Value of a House?
The assessed value of a house is the amount of money a property has been determined to be worth for property tax purposes. A government agency, such as your local city or municipality, is who will conduct the assessment of your home for tax purposes. When doing so, they will look at comparable home sales in your location as well as inspections that they conduct. This assessed tax valuation is generally less than the fair market value of your house.
How Do Appraisers Value a House?
Depending on whom the appraiser works for, they may appraise your house differently. For example, if you are looking to qualify for a mortgage to purchase a new home, your lender will hire the appraiser to confirm the value of the property based on the selling price. They donít generally give a general fair market value of the home.
The tax assessment appraisal will come up with a value for your home based upon the factors discussed above. Conversely, appraisals conducted by real estate agencies before listing a home for sale are generally done with the idea of determining the value of the property based on what it might sell for on the open market.
No matter what the purpose behind the valuation, the appraisal will be looking at a number of factors and comparing them to other homes in your location, including:
- Neighborhood quality and popularity
- Lot size and quality
- Age and quality of home
- Size of home, including square footage and number of bedrooms/bathrooms
What Does Tax Value on a House Mean?
The tax value of your house determines how much you pay in local property taxes. In most states, you will pay property taxes to your local municipality, county and possibly even state. All of the rates for the taxing entities are determined on a percentage basis, and how much you pay in property tax dollars will be based around the tax value of your home.
Once an appraisal conducts his or her assessment, your home will be given a tax value, which, as mentioned before, may be lower than the fair market value of your home, which is a good thing for homeowners. If the overall property tax rate for your location is 4 percent and your home is valued at $200,000, for example, you will be required to pay $8,000 in annual property taxes, split among the various taxing entities.
What Adds Value to a House?
Generally speaking, the better shape your house is in, the more valuable it will be to potential buyers. Most buyers today who pay top price today want their home to move-in-ready, updated as much as possible, have an open concept and be as pain-free to begin living in.
One of the most effective ways of adding value to your house is to give it excellent curb appeal. While you canít judge a book by its cover, as the saying goes, the first impression you give potential buyers is often the most important one. By having a nice manicured lawn, planting flowers and adding simple decor to the outside of your home, youíll instantly attract more buyers.
Other items that add value to a house include:
- Remodeled rooms, especially kitchens, living rooms and master bedrooms
- Energy-efficient features such as smart thermostats
- Larger spaces
- A good flow between rooms
- Low maintenance features, both inside and out
- Being in a prime location near amenities such as parks in the suburbs or public transportation in urban areas
What Brings Down the Value of a House?
There are also a number of factors that could bring the value of a house down. In addition to the obvious features of the home - such as its overall condition and whether itís been updated recently - there are several outside factors that must be considered here. Some of these include:
- If your home is located near train tracks
- If the neighborhood is noisy
- If homes in the neighborhood are run down
- If there are a lot of foreclosures or abandoned homes in the neighborhood
Those factors of the neighborhood are not things that you will ever be able to solve on your own. As such, itís important to evaluate all of those factors (and more) if you are looking to purchase a home for investment purposes. A little bit of work on the front end to educate yourself about the neighborhood factors in addition to the specifics of the home itself will go a long way in ensuring you make a sound investment.
How to Find My House Value Online?
Zillow provides one of the best tools for figuring out the value of your house. The site provides what it calls a Zestimate for each property, even if it is not on the market for sale. Simply go to their website, type in your address, and you will get an estimated value of your home.
Zillow says its Zestimate is an estimated market value of your home. It is not an appraisal of your home, and should be used as a good starting place to help you determine your homeís value.
You can also take this process one step further by searching a listing of homes for sale on sites such as Zillow, where you can drill down to those listed in your region, Zip code or even your local neighborhood. By seeing what other homes are listed for, and selling for, youíll be able to get a good sense of what your houseís fair market value might be.
How to Determine the Rental Value of My House Online?
Zillow also provides a free online tool for determining how much rental value your house might have. Simply go to the site, click on the Rent tab at the top, and then enter your Zip code to get a list of homes that are currently listed on the market for rent. You can then drill down further by matching up your houseís details and amenities to the filters available to get a better sense of what your rental value might be.
Other sites such as Rentometer and Cozy also provide easy-to-use rental value lookup tools, but they also come with a pricetag. The U.S. Department of Housing and Urban Development publishes an annual rental guide for Section 8 housing, which could be a good tool as well, and searching for properties for rent on Craiglist might not be a bad idea, either.
One of the best tools available, though, is HomeUnion®ís RENTestimate. By entering your address on the site, you can see what your homeís rental value would be, along with the houseís overall value and what the expenses might be to have your property listed for rent as well.
The most important thing to keep in mind when considering investing in the real estate market is that the more education you obtain up front, the better you will be able to minimize your risk in the long run. The value of your home the return on investment youíre likely to get from it - whether it be by reselling it or renting it - will depend on a number of factors.
Some of those factors you will be able to control, such as the quality and appearance of your house and property. Some factors you will not be able to control, though, such as the school district its in, the quality of the neighborhood and its proximity to transportation or high-volume areas.
By partnering with a company like HomeUnion®, you will be provided with a wealth of information, knowledge and experience that can help you see success in real estate investment, no matter what your strategy for doing so is.