A huge problem many homeowners face is that of the upside-down mortgage. In many areas, home values plummeted over the years to the point of being lower than what is owed to the bank. However, we all know that the world of real estate is always changing and sometimes it’s just a matter of time until the market turns around. Over the past few years, recent trends in health care and the economy have affected home appraisal in somewhat surprising ways.
Elders and Children
Due to the difficulty in finding sustainable work for many millennials, more of them are moving back in with their parents until they can afford their own home. Likewise, healthcare dollars have slowly been transitioning towards home care instead of institutional organizations.
Naturally, homeowners need to accommodate the new housemates. Many do this by converting or finishing basements, garages, stand-alone structures already on the property and other spaces with external doors to livable areas.
This is a smart move, because it not only provides privacy for their loved ones, but it offers the opportunity to be rental property in the future. Some homeowners enjoy having the extra facilities available for guest quarters when far-away relatives come to stay and they’d prefer the comforts of home rather than a hotel.
Home Value
In the past, these areas, which are sometimes known as “in-law suites,” posed a challenge for appraisers to place value. However, because the change has been so big, The Appraisal Institute conducted a report called “Understanding and Appraising Properties with Accessory Dwelling Units.” This study demonstrated that these units can add an increase of market value between 7.2% and 9.8%. These numbers are important when selling or insuring the home.
In addition, the report also provided appraisers with guidelines to determine property value for homes with these units built into them.
Although caring for your elder parent or having a child return home who is having a difficult time landing a good job is a mixture of enjoying their company and frustration at their situation, the hidden benefits to your property may be surprising when you make remodeling adjustments to your home to accommodate them.
