- Moisture, poor maintenance, locational disadvantages, and unsightly street appeal can cause home depreciation.
- A high-quality waterproofing system for outdoor moisture and routine maintenance help prevent deterioration.
- Renovations should match aesthetic trends to maximize property appreciation value.
- An emergency fund and staying updated on local real estate market trends are essential for maintaining home value.
- Regular inspections and timely action can reduce the risk of home depreciation.
Buying a home is a significant investment for most people. It is where you create memories with your family and build a sense of pride as a homeowner. However, one thing that you may not be aware of is that a home can lose its value over time. Depreciation of a home happens, and many factors can cause it. Here’s a look into home depreciation, reasons why it’s happening to your home at a fast rate, and what you can do to reduce the depreciation of your home.
Home Depreciation
Property depreciation is a decrease in the market value of a property due to wear, tear, or natural obsolescence. Homes can depreciate when changes occur to what buyers want in a home and the amount they’re willing to pay for it. There are various reasons behind home depreciation. Here are some of them:
Moisture
One of the leading causes of home depreciation is moisture. Moisture can enter the house through various sources, such as plumbing issues or cracks in the foundation. If not addressed immediately, it can cause significant damage to building materials and structure. This could lead to an increase in repair costs and make your home less desirable for potential buyers.
To deal with moisture, you need first to handle outdoor moisture. If you have a deck, consider applying a high-quality deck waterproofing system. It’s made from moisture-resistant materials, making your deck more resilient over time. The system can ensure that no moisture can enter your home or damage your deck from rain and other forms of moisture.
Poor Maintenance
Poor maintenance is one of the most significant reasons for the fast depreciation of a home’s value. Homes that aren’t well maintained may result in a decrease in your home’s worth over time. It is recommended that you keep up with routine maintenance schedules for your home, such as roof inspections, pipe leakages, and AC servicing. Failure to do so can lead to more significant issues that may require costly repairs, reducing its value.
Locational Disadvantages
The location of your home is essential when it comes to the property’s appreciation value. If your home is in an area prone to natural or human-made disasters such as flooding, natural disasters, or other misfortunes, having a house insurance policy may not cover the significant damage costs. There is also the case of a lack of fundamental public amenities such as recreational facilities, hydra, transportation, or security service within your area, which may cause the fast depreciation of your property.
Unsightly Street Appeal
Your home’s first impression plays a crucial role in its value. A house that looks unkempt from the outside, such as peeling-off paint, unwashed windows, and cluttered yards, can have a falling effect on the property’s appreciation. Ensure you keep an eye out on your home’s curb appeal regularly, and along with routine maintenance, this helps keep your home’s value up.
Renovation Mismatch
Renovation can be a great way to boost your home’s overall appeal and value. However, when renovating your home, you should be mindful not to create a significant mismatch of styles. Compliments on the overall aesthetic and in-style features such as rustic, modern, or contemporary interior finishes give the appreciation value of your home an edge. A significant contrast of self-opposite structures and finishes will lead to a loss in value as it repels potential buyers.
Tips to Reduce Depreciation
Your home is an investment that can depreciate over time if not correctly maintained, and a lack of due diligence is paid to significant factors affecting its appreciation value. While some factors, such as locational disadvantages, are out of your control, some problems require intentional action to avoid fast depreciation. Here are three tips to ensure that your home is resilient against depreciation.
Have an Emergency Fund
Your home depreciates faster because you don’t deal with problems as they arise. Having an emergency fund for home repairs as they arise, such as plumbing or structural issues, is essential. This can help you save time and money and make it easier to address problems before they become serious. Follow the 1% rule when doing this. It means saving 1% of your property’s value annually for renovations and maintenance.
Keep Up with Routine Maintenance
Routine maintenance is vital to preserving your home’s value and keeping it from depreciating fast. Have a schedule for maintenance and repairs and follow through with them. It would help if you kept up with your home’s curb appeal, such as regular painting and cleaning.
Stay Informed on Local Real Estate Market Trends
Keeping track of local real estate market trends can provide insight into what buyers want in a property and the amount they’re willing to pay. If changes need to be made to make your home more desirable, this knowledge helps you stay ahead and maintain the value of your home.
It is essential to understand depreciation when investing in a property so that you don’t suffer huge losses due to devaluation. Regularly inspect all aspects of your home and take necessary measures promptly to combat any depreciation. The tips above can help keep your home value up and ensure your investment is worthwhile.
