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Real Estate Investing
Local Stores Affect Real Estate Prices
The real estate market is a complicated place. Especially if you’re trying to get an idea of what a property is worth prior to buying or selling. There are many factors that determine the value of a residential property from proximity to good jobs and schools to the crime rates of the neighborhood and surrounding communities. Did you know that local store and restaurants affect real estate worth as well?
When determining value, commercial and residential properties share common factors like size and shape of the structure and the type of area that it’s in. When commercial property is evaluated other similar properties are taken into account, much like a residential property. If there are properties of similar size, condition and income potential in the area, that will bring values down unless the property has special features that would attract tenants and other business to the area more easily.
The effects of area restaurants and retailers affect each type of real estate differently. A specialty grocery store will prop up values of homes within a block and half by up to 20%. However, that same store may lower the value of the not-so-hot grocery store down the street. Other nice perks for your neighborhood include a small movie theatre, a wine shop, a bookstore, fitness center or garden center; it’s called the amenities affect. All would raise residential property worth to a degree with the movie theater having the most dramatic effect on values at 14-30%. Those amenities can boost values of other commercial properties by bringing in more traffic.
Keep in mind that there are some types of businesses that can negatively affect property values such as day spas and CD stores. The best bet is to consult with professionals if you want an accurate assessment of what a property is worth.
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