Your property will increase in value with these tips

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Are you buying a property without ruining yourself? Interested parties should consider several important things that go beyond the purchase price and financing terms.

The first thing to do is to choose the right property: What should you consider to increase the value of your dream apartment or dream house – for the owner or for the children who will inherit the house – from the moment you buy it? Here are six tips from three real estate professionals.

Three experts surveyed agree: “Location remains the most important criterion influencing the value of a property,” says Michael Loose, CEO of Investissements Fonciers (formerly La Foncière) in Lausanne. “Are there factors that could improve this situation? Is a new train or tram line planned to be connected to the public network in the coming years?» The rule of thumb is: “Choose a growth or high-demand area close to public transport, schools and service providers,” says Thang Nguyen, entrepreneur and co-founder of Geneva real estate group Swissroc.

Location rules can be short-lived: “The factors vary by location, but the investment rules remain universal: it’s better to be near transport, shops, and not near a fire station,” sums up Lorenzo Pedrazzini, co-founder of the independent company AMI International. Geneva real estate consultancy.

The risks of new buildings nearby that could worsen the landscape should also be considered in the decision. “If a building is thrown off the ground that creates too much shadow or takes away breathtaking views, your property will lose value,” emphasizes Michael Loose.

Thang Nguyen observes that mountain destinations are very popular: “It is very popular to buy a second home in the mountains where snow is certain. There is huge upside potential in these areas.”

Thang Nguyen says that in addition to location, the type of property also affects future price: “Whether it’s a single-family home, a semi-detached house or an apartment – detached homes tend to increase in value the most.” 4 and 5 bedroom apartments are the most sought after apartments with the highest square meter prices. There is upside potential due to demand, but the entry price itself is already high.

Another criterion, Lorenzo Pedrazzini adds: “Size or architectural features (which previously met the greatest demand) are also part of the market criteria or liquidity (the ability to resell quickly)”, adds Lorenzo Pedrazzini.

The costs of anticipated renovations should be considered at the time of purchase. Careful scrutiny must be done to anticipate these. “It is important to control the quality of construction and materials in order to estimate the maintenance costs of the building,” explains Thang Nguyen. “Roof, plumbing and electrical system should be checked.”

Thang Nguyen points out that eco-efficient properties are easier to rent and sell. Energy efficiency has become a central criterion when evaluating real estate. “Those interested should check the property’s energy classification,” advises the Swissroc partner. This classification has a direct impact on heating, electricity, sustainability and long-term maintenance costs.

Currently, more than 80 percent of the real estate portfolio needs to be renewed to meet the new ecological efficiency criteria. “These replacement costs should be included in the purchase price.” The higher the accepted label, the better it affects the price of the property.

It may be helpful to keep an eye on different objects than everyone else is looking for. This increases their reverse potential. That’s Michael Loose’s suggestion. «Most people want to buy a new or greatly modernized property with no technical problems, efficient, environmental standards, low electricity consumption, alternative heating if possible; so the price will be very high,” he explains.

“But if you have the opportunity to take some risk and buy a property that doesn’t have all these qualities, but you see potential for renovation and you’re interested in the business, not everyone can do it? price advantage.”

In this case, you buy cheaply and undertake the technical and energetic renewal. There can be a large margin of value between the cost and the value you get in the end, but you have to be careful.

Likewise, it is possible to purchase an immovable that has been declared bankrupt in the auction held by the enforcement and bankruptcy offices. When bought at a ridiculous price, it can be renewed and appreciated from scratch. “In such cases, you need to put the purchase amount on the table, the money should be available immediately,” says Michael Loose. In short, you must either have appropriate savings or finance it in advance.

Finally, some apartments have expansion options that may be available. “It is becoming more and more rare as sellers are now well advised by experts and conduct research before selling their property. But it is possible to find vacant lots,” says Michael Loose. These are plots that you can build or expand.

In some cases, an uninhabitable basement can also be turned into a living space. In these cases, however, it is important to check the applicable municipal and cantonal regulations before starting the expansion. The same applies to top-ups. Buildings have the possibility to add one or two floors, which can increase their value; however, this requires substantial investment funds.

Lorenzo Pedrazzini points out that famine is the most important factor. “There is only one economic phenomenon that supports prices in our country: the shortage of supply. Renting or buying is complicated. Why? Switzerland has been a country of immigrants for 20 years. During this time, 1.5 million people had to be accommodated and at least 35 million square meters had to be allocated for this. Construction activities have not been able to keep up and will not be able to keep up without a political revolution. Therefore, every purchase made in Switzerland within five years, regardless of price level, with the same economic situation (low unemployment), especially in cities or their surroundings, is associated with added value.»

Thang Nguyen agrees: “In a market like Geneva, supply is very limited. This factor is even more important than interest rate developments due to the increasing housing shortage. In the long run, prices will generally rise in Geneva, Lausanne or Neuchâtel.”

However, there are differences between individual object categories. Demand for luxury properties starting from CHF 3 million is not falling. In contrast, the prices of objects between 1 and 1.4 million fluctuate more. They’re not selling well right now and the potential isn’t really there. These objects may increase in value, but only over a long period of time.

Finally, economic variables play an important role in increasing the value of a property: Lorenzo Pedrazzini explains that if the cost of capital (interest on debt) is lower than inflation and the development of the real estate market, the owner will profit. “It’s a bet, but that’s how the value of real estate increases. Every mortgage buyer is an uninformed speculator who bets on central bank policy, the exchange rate, and the economy.”

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Source :Blick

Tim

I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.