Factors affecting home's value

[Eli M.]

Dear BP members,

I was wondering, what factors could possibly affect a property's value?

If there's a public school across the street, is it a plus or a minus?

If there's a bodyshop next door, is it an advantage or disadvantage?

Where can I find out which things could possibly affect my property's value, likelihood of renting it out, play a role in the house insurance premium?

Thank you all so much in advance 

[Michael Tan]

Originally posted by @Joe Splitrock:

Insurance is just based on either value or replacement cost. It costs the same to rebuild a house next door to a auto body shop or next door to school. Factors that affect insurance usually have more to do with the age and condition of the property. Roof, electrical, plumbing, etc. Location only plays in as far as if the property is in a flood zone or other weather related factors in the area. You can call a local agent to get you a quote on insurance and they can give you a rough quote prior to even buying a property.

Speaking from experience as an insurance underwriter, there are a number of variables that affect insurance premiums. Replacement cost, as Joe mentioned is a main driver and driven off of type of construction (i.e. frame, brick veneer, masonry, etc...), type of building (ranch, 2 storey, etc...), size of building, and zip code (labor and material varies depending on location) but there are other variables that are considered as well. We follow the principals of COPE, which stands for construction, occupancy, protection, and exposures. From a construction standpoint, a fire resistive building is superior to a frame construction building and would have a lower insurance rate but would have a much higher replacement cost.  A building that is occupied as a single family home is less of an exposure to an insurance company that a rooming house would be so would be. Protection, i.e. how far fire hydrants and fire halls (whether full time or volunteer) are from the location is important as it will determine response time in the event of a fire. Finally, exposures, e.g. is the building in a quake zone? flood zone? frequency of wild fires?

Hope this helps.