7 Important Questions About Property Valuation
Valuation refers to the process of determining the present value of a company or an asset. It can be done using a number of techniques.
Moreover, there are a few factors that come to play when analysts want to place value on a company. Normally they will look at the management of the business, the prospective future earnings, the market value of the company’s assets, and others.
Valuation is an important step to allow you to determine the price of your property. Therefore it is necessary for you to know the steps of property valuation as well as what the ask your valuers.
1. How do you measure value?
There are plenty of methods available in the valuers’ arsenal and the most common used is comparison method. Whereby they will compare your property to a neighboring property which was sold recently.
Most comparison method are done before the physical inspection of a property. This allows the valuers to find the rough price of your property.
From there they will add and subtract other factors until you will get the actual cost of your property.
There are other types of methods; investment method, contractor’s method, costing method, residual method, and profit method. Hence, be sure to ask your valuers which method could rake in your highest profit.
2. What will decrease my property’s value?
If you plan to sell or rent your property, then you will need to valuate it. To fetch the best price in the market, you have ensure that your property is up to par and your valuers can guide you on how you can avoid a decrease on your property’s value.
Some of the smallest of things are able to decline your property’s price. Such as pets. If you plan to rent out your property, and the odor is unpleasant due to pets, it could result in a decrease property asking price.
Also, update your property with the latest interior and technology. You can ask for a higher rent if you have a state-of-the-art home appliances such as smart TV, air conditioning, and air purifier compared to none at all.
3. How to increase property value?
The goal of any property investment is to increase the value. You want it to be worth more than when you bought it.
Therefore, there are simple ways any property owner can do to boost the appeal of their property. You can also these fixes yourself! Although they are low cost, they can make a huge difference in the way your property looks and adds value to your property.
Clean and maintain: Ensure your property is in top notch and appealing condition to the potential tenants or buyers.
Paint: A fresh coat of paint can make a huge difference. It can revive and brighten a tired space. Neutral colors are universally appealing.
Change Fixtures: Change out a doorknob, light switch cover, cabinet handle or even a light fixture. It’s a simple method to breathe new life into a space.
However, you should never over-improve your property as it could lead to a decline in the value. There plenty of other ways to add value to your property and is within the low to medium cost range.
4. What affects the price of property?
There are plenty of factors that affect the price of property. Such as location, accessibility, upcoming future developments, politics, economy, and most importantly, the health of the property market.
Whether you’re a seller or buyer, understanding the property market is crucial if you intend to seize on a profitable opportunity, especially in terms of property supply and demand.
5. How do you calculate depreciation?
Depreciation is another term for loss of value . You should note that physical, functional, and even external obsolescence are some of the significant contributors to such losses. While at it, you will witness that there is curable as well as incurable depreciation.
Usually, you will spend little on repairing curable depreciation. Such can hardly hold for incurable depreciation.
6. How do I set the right property asking price?
When it comes to asking price, one can’t just shoot for the moon ask for ridiculous prices. Hence why valuation is necessary to determine the price of certain property.
By taking care of your property and ensuring it is comfortable for your the future buyers or tenants, one may increase the price and receive positive profits.
Although you may follow the other prices set by your neighboring areas, not all houses are the same when it comes to appliances and furnishing. Hence why fully furnished houses are able to fetch high prices compared to those with little to no furnishing.
By consulting with your valuer, you can set a price which is beneficial for you and not lose potential customers.
7. How much will you charge for services?
Experts will always charge different amounts. Besides, they embrace distinct approaches to billing. Depending on your budget, ensure that you choose someone that will hardly inconvenience you in the long run.
Take your time to compare how much different professionals charge, and whom you can afford and work with. This way, you will be confident of avoiding financial constraints at some point too.
Article by: IQI Global
