4 factors that can influence the value of a property

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The value of a property is determined by the following factors:

LOCATION

Buying a property is always about location, location, location. On top of having good accessibility and amenities (especially within walking distance to shopping malls), properties that are near the city centre or surrounded by colleges/universities/business activities (commercial areas) will always be in demand and they can generate good rental income.

With the ever worsening traffic conditions in Kuala Lumpur, the first preference of everyone is always to get a property that is within walking distance to LRT/MRT stations. Such properties carries a higher value.

MIX DEVELOPMENT PROJECTS

With all things equal, a single condo project development does not have any strong factors to influence its future property value as compared with a condo with a shopping mall that is below or just next to it. Some projects, besides having residential condos, also have office blocks, supermarkets, schools, sports complex, police stations and fire stations etc. Such mix-development project is like a mini-township which gives its residents all the required amenities under one place.

FUTURE DEVELOPMENTS

When assessing a property, investors are mostly concerned about any future developments within the vicinity of the property. They will check whether there is still a lot of undeveloped land available within the area.

Generally, future units entering into the market will only mean one thing – more difficult for owners to rent out their units (thus getting lower rental income). However, areas which are well sought after e.g. Mont Kiara is an exception.

On the other hand, property in prime areas with limited or no more land for development will be well sought after. As such, one would expect the value of KLCC properties to rise when all the limited available land for development is gone.

Premium units with nice panorama view may be blocked by new developments in the future. Already tight traffic flows may worsen with potential new developments in the future.

CONDO DENSITY

People generally do not like condos with lots of units. There will be issues concerning the time needed to get into lifts, traffic congestion coming out or entering the condo. There will be difficulty in finding parking  space outside the condo.

For the investor, more units mean more supply than demand resulting in difficulty to get tenants.With so many units, it will be more difficult to control the different types of people moving into the condo.

As the land near the KL city town centre is now very expensive, we would expect more developers to build high density condos.

Conclusion

If you want to get a property with good capital appreciation potential and can command good rental rates, do look out for these 4 factors when considering buying a property.

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