How to Maintain Property Value?

שכונה מטופחת בגבעת עדהI have recently visited a US real-estate market. In the last four years the market has been on the rise, and recently its activity somewhat decreased in the typical cyclicality of every market. Once again, it's possible to see that certain houses put for sale continue to achieve high market prices in spite of the general decrease in sales.

 

Generally in Israel, and specifically in Zichron Yaacov, Binyamina and the surrounding areas, the market probably continues to rise in spite of the war, which shuffled the cards during the last summer, and its overall effects have yet been discovered. In a rising market "everything sells" and the clients often ignore the faults of one house or another, fearing that they might lose it to a different potential client.

 

But markets rarely last forever, and the nature of real-estate markets, powerful as they may be, is to rise, reach a certain level, decrease and rise again. Thus, especially for people perceiving their homes as an investment, it is important to remember the factors maintaining the market's value during market decreases (god forbid...).

 

We can greatly improve our real-estate in two main aspects. The first is the "Finish", and the second is Maintenance. Much was said on these issues, and we are only in the beginning of a significant change in the relation of different proprietors to their properties. Attention sellers, buyers are one step ahead of you, and in the last few years these issues are highly emphasized.

 

We'll start with the finishing. A house with poor finishing, inaccuracies, the occasional crack in the wall, maladjustments, poor uniformity and other factors, may be more significant than just visually. A poorly installed window will cause wind drafts inside the house, a misplaced roof tile may cause severe wetness and humidity problems, a poorly leveled floor tile will imply that the fundamental level beneath it is faulty. Sometimes, excellent finishing will compensate for mediocre construction, and for that reason many buyers will have the property professionally inspected prior to purchasing it, but there is no doubt that poor finishing immediately lowers the property's value, and this decrease is often larger than the actual cost of good finishing. A tilted floor tile here and there may cost the seller thousands of dollars, causes the buyer to have false suspicions and may detain a sale or completely prevent it.

 

As for maintenance, in the US it is acceptable to paint the house every 3-4 years, to re-tar its access path every 5 years or so, to fix the floor every 3 years, to clean drains and chimneys before every winter and so on. The house's annual maintenance and improvements may cost around 5-10% of its value. This maintenance prevents more serious problems from emerging, and maintains a fresh and perfect appearance of the property, helping it to maintain its value, and when it is offered for sale - to be purchased faster than similar unattended for houses.

 

In the US finishing, maintenance and improvements are considered very important. But that's not true only for the US. In certain places in Israel, such as the luxurious residential towers in Tel-Aviv and Ramat-Gan, we are starting to see this kind of meticulousness. And the immediate result is - entrepreneurs achieve "American" prices, fast sales and pleased customers.