Capital appreciation – The value you gain by investing in real estate
When it comes to property, capital appreciation is when the value of a property has grown over time. House prices can go up and down depending on factors such as property market performance. When an investor is able to sell their property for less than they initially paid for it, this means they’ve made capital growth returns.
Capital Appreciation can be defined as either the increase of an investment’s value or an increase in the price or value of assets.
Compared to other industries, real estate is unique given the intrinsic capital appreciation it provides to homeowners. A purchased house will be worth more in the future. This is due to the scarcity of land and the increase in housing demand as the population grows over time. However, not all real estate is created equal with certain real estate appreciating at a faster pace compared to others. This is primarily due to the location of the property and its high-end nature. Today, we will take a look at why certain properties are priced higher than others and how this is reflected in capital appreciation.
Location
A modern 4 bedroom all ensuite villa located in Runda that is available to let for 3500 USD | pc: point properties limited
To begin with, location is one of the key factors that determines the appreciation of a piece of real estate. If a residential property is located in a metropolitan area, it means that the homeowners will easily access public transportation together with other amenities. This is not the case for residential properties in rural areas Furthermore, the fact that Nairobi is the largest business hub in East and Central Africa further compounds the capital appreciation of residential property in the area. Nairobi’s importance to international trade in the region means that the demand for real estate in the City will only increase over time.
Luxury
Other than location, luxury is another key factor that determines the capital appreciation of real estate. Luxury real estate offers homeowners the possibility of property flipping in the future given its intrinsic high-quality nature. High-end residential property is always in demand and this is compounded by the expanding demand from a growing African middle-class. For this reason, a homeowner can buy a Point Properties property and find a willing buyer in the future. The high-end amenities offered by these properties will always be in demand and this explains the capital appreciation that Point Properties promise its buyers. Renting out the purchased property is also another option for the homeowner. This means that a Point Properties property can become a secondary source of income for the owner.
Scarcity of land in upmarket areas
The land is scarce and in high demand in upmarket areas and as a result, the prices have increased. An acre of land in Westlands is valued at Ksh. 400M. Buying property in such a location automatically makes it more valuable due to the high demand for land.
1 acre plot of land located in Lavington that is up for sale for 2.3M USD | PC: point properties limited
Amenities offerings
The type of amenities a development offers its residents is a key determinant of the price and value of the property. Most developers offer standard shared amenities. We at Point Properties go the extra mile in addition to the ordinary we make our amenities extraordinary.
A picture showing an apartment in Kileleshwa with amenities such as a fully equipped gym, an intercom system and CCTv cameras that is available for rent at ksh 110,000 per month | PC: point properties limited
Quality
The finishing used for a property influences the value it gains.
Our products last 10 years plus with zero maintenance so you don’t have to spend extra amounts of money which affects your R.O.I
All in all, not all residential properties are created equal. Factors such as location and luxury offerings determine the capital appreciation that a specific piece of real estate will offer you. The high-quality offerings of Point Properties, properties offer you both and this opens up a world of possibilities.
It is our mission to serve our clients real estate needs with diligence. We know our growth will spring from our efficacy, where we shall be known as reliable partners in the real estate sector.