If you are want to get an accurate assessment of how much your investment property is or will be worth, your best bet is to visit a real estate agent or valuer and enlist their help.
But if you are looking over a lot of different properties, the cost to have a valuer assess each one would be exorbitant, and would take far too much time. And while a lot of valuers insist that assessing properties is as much of an art as it is a science, here are a few of the methods valuers employ.
What Valuers Look At
The most basic component of assessing a property like a valuer does is looking at some of the key components that make up the property and a building that is built upon it. These components include:
- Size and layout of any structures built on the property
- Land Size
- Age built
- Number of rooms
- Condition of the property
- Development potential
- Architectural style of buildings
- Distance to services, schools and transport options
Valuers use all of these attributes of a property together to find the ultimate expected value for a property.
How Valuers Assess the Value of a Property
Once a valuer has determined all of the aspects of a home or property they need to know, they typically employ one of two methods to determine the value.
- Comparison Method – When using the comparison method, valuers research sales of similar properties in the past six months, giving an estimate of how much a property will sell for in the current market.
- Summation Method – The summation method means a valuer takes the value of individual aspects and improvements and many of the different attributes listed above and adds them together to find a value for a property. This usually takes into account how much the market is willing to pay for these improvements to find a value that matches what the market will pay.
Typically, valuers combine their knowledge of these different practices to determine a value for a property. The key to both methods is using up to date data to ensure you are comparing the property accurately with what else has sold. Data can be purchased from many different providers and can be cross matched against photos available in the sold area of most real estate portal websites. With some good research and a pulse on the market, you too can assess like a valuer.