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Value Appreciation- Causes and Effects

In whatever context it is used, the word "appreciation" has a positive connotation. In the field of Real Estate, "appreciation" refers to an increase -in value of real property. When your property "appreciates" the effect is that you have greater equity against which to borrow, and you realize a greater profit when you sell. Several factors can cause a property to appreciate: inflation, scarcity, infrastructure development, neighborhood improvements and positive changes in nearby properties.

Of the factors listed above, inflation is the most common reason for an increase in value, but is also the least beneficial to the property owner. Most often you will find that the increased cost of living that comes with inflation eats up any gain you might have benefitted from in property value. The only time this is of serious benefit to a property owner is when she/he is selling a property to move to a different town or country where inflation has not yet driven up costs. For those of us who stay with our homes and community, inflation is principally a bunch of numbers, and the increased value probably pleases the tax assessors more than anybody else. Scarcity is a little like inflation in that frequently by the time you notice it, it's already happened. Think about the abundance of beachfront property for sale on Ambergris Caye a few years ago. Today about one tenth as many lots are for sale as there were perhaps five years ago. When there is not enough to go around, the price naturally goes up.

Other factors that cause appreciation are those that cause a TRUE increase in the quality of the property itself. These are quite fun, because you can have a definite hand in creating the appreciation of your own home, and neighborhood. Here are some examples of how this works:

Boca del Rio got a lovely new park not long ago. The homes that now face this park used to face a messy and eroding shoreline. They had little view, and certainly no swimming area. Now that the park is in place, this neighborhood is clearly a better place to live. It is prettier, cleaner, as better roads and lighting, and children have a safe place to play. The homes in the immediate area surely appreciated at least 10% the minute the park was opened.
This is an example of "infrastructure improvement" causing appreciation. Also note that in Boca del Rio, several very nice new homes have been built. Some of the older small homes have had additions, or bright, new paint. Other neighbors are simply taking more pride in their own yards and shoreline. As each little change for better quality occurs, you also receive the benefit of value appreciation. Values in this area are seeing an upward swing that far outstrips any inflationary trends, because there is a real physical change for the better. This is not the only area in San Pedro experiencing positive growth take a look around your own neighborhood for upbeat happenings.

People with an eye to the future may wish to buy property in an area where there is anticipated appreciation from positive neighborhood development. Others may wish to make the changes happen by being the seed for change that needs to come. You can do this by doing what you can to improve your own property. Simply keeping it neat and clean goes a long way. Painting your home in a new and colorful way, or doing some creative landscaping have very positive influences as well. You can look around to buy a "fixer-upper" house, or one where construction is not yet complete, and repair or finish a "neighborhood eyesore" turning it into a centerpiece of beauty. Is there some old junk car or cart in your yard or along your street? Get some help and get rid of it! Teach your kids "betta no litta" and set that same example yourself. When your teenagers are restless, get them started with a flower garden. These are simple, but effective ways to cause appreciation in the value of your home, your neighborhood and community. This is an example of a situation where what is good for one is good for all pull together and the benefits are nearly unlimited.

Quality of life is a critical factor in "appreciation." Government does its part when it supplies its citizens with facilities and services that individuals cannot provide for themselves. Our new water and sewage scheme did a lot to improve the quality of life in San Pedro. Good police and fire protection are also important in the quality of life in our town. The lighted buoys on coral heads have made it safer to travel by boat in the evening, making certain neighborhoods less isolated. When you make demands of Government, think "WE" not just "ME". Private citizens who have had dreams have contributed to the value of the community - the library, the museum, and the Costa Maya Festival all began with an idea and came together with a lot of hard work. We all benefit from these things. Our properties, our homes, our town, all have "appreciated" from these dreams coming true.

So folks appreciation is in your hands much more than you might have thought ! Pull together for a more prosperous life for yourselves, your children and theirs.

Thanks for reading ...
Diane Campbell

IF YOU WOULD LIKE MORE INFORMATION on buying property in Belize, or to contact Diane or her husband Bob Campbell, click here.

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