When it comes to Real Estate investing, or for personal use there is a lot to consider. You must think about location, rice, and development for future growth. Another important thing is what you want to buy a lot, a flat or a built home, and other factors like bank loans, taxes, or EMIS.
How old are the building and the land? And How the property gets appreciated and depreciated value by time.
Have you ever thought about that? this factor has been overlooked but it’s more important for determining the long-term value of your investment.
Let us know more about what exactly building age and land age are and why it is important to understand to make a smarter decision.
What Building Age is?
Let’s talk about the building age. It is pretty simple – let us talk about a building that was constructed in the 1990s, then now in 2024 the age of the building would be 34.
It sounds simple, right? but don’t fall for this as the building value depreciates on its market value.
The value of a building may depreciate due to various reasons like poor maintenance, lack of facilities, etc. Older buildings come with a charm that the newer buildings can’t replicate. The older buildings give you the vibe of a home with a history with those walls, and floors that have been around for decades. But these older buildings have potential for higher maintenance, like outdated lumbing roofings which affect the value of the building.
And older buildings do not match you with the newer buildings and need renovations.
What is Land Age?
Let’s now talk about the land age. and technically lands do not age as the buildings do. And in real estate when we speak about the land age we are referring to the value of land over time and land tends to appreciate. The main factors are location and development.
If you buy a piece of land today and that area is on the verge of development, maybe it might be out now but after ten years the same piece of land could be busting with schools, parks, malls shops, etc.,
The land value will increase over time because of the changes around the area where you bought the land years ago.
Land can be a solid investment especially if you are looking for, a long time investment. Buildings require maintenance and renovations as land needs low maintenance and gains value over time, especially in developing areas, where spaces are becoming limited.
What’s More Important Building Age or Land Age?
Hey, are you confused about what to focus on – building or Land!!! the answer isn’t simple we need to understand first how these two factors lay off each other.
Let us consider you are buying the older building then think about the land it sits on, and the desirable location, and see the growth and development in that area in the coming years. If it fits in your thoughts then the age of the building might be less concerning even if the building depreciates the land value will increase over the years.
If the building is newer make sure the land is equally valuable. Even if you are buying a brand new building in the middle of nowhere, where there is no development even if the building is new the land value will not appreciate even over time as we thought.
One of the key factors that can recognise how the property gets appreciated and depreciated. The land gets appreciated over time as they say they are not making more land. This is why investors look for opportunities to invest in the land even if they are not building anything on it.
Alternatively, if a building gets older due to renovations, outdated designs, or repairs, its value depreciates over time. And can be a significant factor if you want to sell the property.
Tips for Investors
If you are an investor and looking to buy a property here are a few practical tips:
1. Evaluate the building condition.
2. Research the land value.
3. Think of the long term.
So, in the end, know about property appreciation can help you to understand and choose between new and older buildings and also how building and land both together increase the value of your investment if they are located in the right area.
If you want more details about how, where and which area can appreciate both building and land values then contact Flivv developers.
