Many people consider that the real estate business can be easy to handle, as all you have to do is find tenants and rent them a place. The truth is that this is not for everyone – real estate investment is a harder business than it looks. First of all, you need to like working with people, and second of all – you need to have an available capital to use it for buying a property.
Talking about this property, even if you find something that you like, you have to take into consideration many things and you need to find answers to some questions. Does your capital afford you to buy it? Can you manage to sustain this business at its start? Do you want to work alone or with a team? Do you plan to make a career out of this or just a second job that brings you income?
Our property valuation Perth experts from Coobs have tried to answer some important questions about being an investor in the real estate business.
How much capital do you need?
First of all, you have to determine if you can afford to buy a property for investment. This means that you have to go to different financial institutions and banks to see how much money they will be willing to give you. The amount will be different from one financial institution to another, and also the conditions might be different. Unless you have liquidities and you can afford to buy a property with cash, you will need to have a mortgage for this business and you will use that property as a security.
Once you have determined how much money you can afford to use, be careful that you don’t have to go all the way with that sum. Find a property that is a little bit cheaper than that money.
How can you find the right property?
There are many properties that are available on the market, but you have to find the one that is perfect for your needs. If you are just beginning, don’t go and buy a house. Find a small complex, a building with few apartments that are easy to maintain and don’t require a big team to do it.
Use a real estate agent or search online. Either way, choose carefully the location and the area, because these will surely influence the price for both buying the building and renting the condominiums later.
Don’t choose something just because you like it – there are many buildings, indeed, but not all of them are fit for you. To make a sound real estate investment, you need to conduct a thorough search and analysis, to be able to take a clearly informed decision.
What comes next?
Once you have found a property that you like, ask for a property valuation and a home inspection. These have some costs indeed, but they are useful. The home inspection will tell you all about the structure and the building, and if there are any hidden faults that you can’t see. The home inspector is specially trained to do this, so have faith in his analysis. Once this is done, ask for the property valuation and give the valuer the report from the home inspector. Now you will know how much your future building is worth and if it has the right investment value that you are seeking.
It’s an important step, as this has utility for both you and the financial institution that lends you the money to buy that property.
Once you have seen that the property is worth it and you have closed the deal, all you have to do now is find the right people to work with you in managing that building. You can’t do it all alone so you need to have a trusted team that you can delegate to do some thing or another.
If you want to make sure that the property you want is worth it, just give us a call at Coobs and we’ll send you the best Perth house valuations experts.
Once you determine that you need a property valuation to find out the market value of your property, all you have to do is call a specialized company and a valuer will come when you’ll be available.
However, this is not an easy process, and the valuer must take into consideration many aspects. The transactions on the real estate market are infrequent and because of this, the prices for each property will be different, because in essence, each property is different.
As you surely have wondered how the valuers come up with the figures that they write in their report, our WA valuations company will tell you about the three approaches that can be used for determining the value of a property.
When the valuer chooses one type of approach, he or she has to take into consideration different aspects, like the type of value that is needed (as there is the market value, the investment value, the insurable value, the value in use, etc), the type of the property, the quantity and the quality of the available date and so on. As practice has proven, none of the approaches is considered better than the other, as every one can be used for determining the value of a property.
The Cost Approach
This was also called “summation approach” as it uses the summing value of the land and of the depreciated value for improvements. The last one is also abbreviated RCNL (which means reproduction/replacement cost new less depreciation). Reproduction means producing an exact, same replica and replacement costs mean the costs for building a house or another improvement with the same utility, with modern materials, workmanship and design. This is frequently used, but there is one exception – in the case of some insurance valuations, when it is needed the value for an exact replica of the building to be covered by the insurance policy.
However, this approach is now considered reliable when it’s used for new structures, while for older properties it tends to become obsolete.
The Sale Comparison Approach
This comparison uses the substitution principle. This comparison uses the principle that an individual who is prudent will not pay more money for a property (house or condominium) than it would cost him to buy a similar, comparable property. This means that the approach is based on the fact that the buyer will compare the asking prices and he will look out to get the property, which is adequate for his/her needs, at the lowest price/cost.
For this comparison, many data is needed. The valuer will collect the prices of selling for similar properties, which were actually sold, not still on the market. This information can be taken only from reliable sources that can be demonstrated – pubic records, real estate publications, sellers, buyers, etc.
The Income Approach
This approach is mostly used to determine the value of investment and commercial properties. This is the approach that intends to model or reflect directly the behaviors and expectations of the typical real estate market participants. Because of this, the process is considered applicable for those properties that produce income, if there is enough available data.
This approach is used for example in those cases when a person wants to become (or is) a real estate investor and wants to know what is the investment value for that exact property. This means that the approach will capitalize the income stream into an indication of value.
Don’t worry if all seems to overwhelming, because all these are just small insights into the work of a property valuer. There are other things that you have to pay attention to, and this surely is not one of them.
Selling your house is a process that needs much attention, and it’s not enough only to find the buyer who is willing to pay you the price that you have asked. Selling your property can mean much more than this, and in this process, there is a step that can’t be overlooked, as you will have to do a property valuation.
According to our valuations WA Coobs company, the property valuation will give you the market value of your property. This means that you can get a good idea about what you can actually ask for your house and what it is worth it. Here are some tips about what to do if you want to get a higher value for your house and a bigger price if you want to sell it.
This is something that everyone thinks about, but few ever do it. This is because a complete remodeling requests not only time, but also a considerable amount of money. For example, if your roof is old, you can think or replacing it. The life of a roof is about 20 years, and if your house is older than 10 years, than you can surely do this. It’s a hard project, but it will increase not only the value of your house, but also your comfort. You can also add some solar panels to reduce the energy bill. Insulating the house, with the attic and the basement, is another successful project that will give you an increased value. Apart from this, no matter how much time you will live there after the remodeling is made, you will surely have the comfort of your life.
If you know that the property valuer comes soon to evaluate your house, there are some small things that you can do to make a good impression. You can fix the doors that don’t work properly, paint the rooms in light colors to make the space wider, change the lighting fixtures in every room and other small things that can be made. The valuer will closely look to all of these, and because you won’t take your kitchen cabinets with you or your bathroom furniture, all of these need to be in top condition. With just a small investment, you can also refurbish the old cabinets and give them a new aspect.
This is a natural process and it needs to be taken seriously when you know that the property valuer will come and evaluate your house. A clean house will leave the impression of a wider space. The valuer must have easy access to all the rooms – the kitchen, the living room, the bedroom, and even the dressings. Pack in boxes the things that you don’t frequently use and store them in the basement or in a secure place. When you take down the personal photos from the walls, make sure that there are no color-spots there due to old age. Give a new coat of paint in all the rooms to change the air and give a fresh look. This will certainly create the image of a well-maintained house.
Just think about what you see when you get near your house. The exterior part of the house is as important as the rest of your property, so take good care of it before the valuer comes. There are some small tricks that you can do to improve it. One of the things that you can do is change the entrance door, or you can refurbish it and paint it anew. This is the access point in the house, so it’s important. Take care of the lawn too, and make sure there is no debris around it or unwanted objects. You can plant some flowers or add a patio for relaxation.
All that you do to increase the value is useful, so tell our Perth property valuers from Coobs everything that you fell is important!
Most of the people don’t know what a property valuation is until they are in the process of buying or selling a house. This is true and they can’t know it, because that is one of the cases when a property valuation is needed.
Apart from that case, this process is also asked when you are looking to have an insurance policy for your house, when you want to make an investment in real estate properties or when you want to determine the value in use of a house.
However, each one of these cases has its own particularities, and our Perth property valuers from Coobs will explain what these mean.
The General Details
A property valuation is a way to determine the value of that property, in different cases. This is because the real estate market is fluctuating, and every property is different, even if there are more properties that are similar. Transactions are not so frequent, and the value of a property is influenced by many factors – the location of the property, the size of the building, the number of rooms and bathrooms, the structure of the building, the improvements that were made, and last but not least, the person who makes the valuation. Some valuers are more exigent than others, and the value will also be different, as one can find different things that seem interesting and more valuable to them.
The Market Value
This is the most common type of property valuation that is asked by the general public. These clients want to have their properties valued, for selling it or for buying it, and it represents the market value. This is also needed in case the house is bought through a loan, as the financial institution or the bank has to know the market value of the property that is used as security for covering the loan.
This can be also used with a house inspection, as the report for the market value will be more accurate and fair if the valuer has at hand the report from the house inspector.
The Value in Use
This is another use for a property valuation, as it gives the NPV for the property. The NPV means the net present value of the cash flow, which the asset (in particular the property) generates for a certain owner (you or somebody else) under a certain, specific use. This means that this use value is of interest to a particular user, and also that this valuation can give you a number that is below or above the market value of that property.
It’s not hard to understand, because for each of you, a property can have a different use value.
The Insurable Value
This is a necessary procedure whenever you want to have an insurance policy for your property. The property valuation will determine how much your building is worth for the insurance policy, in case they have to cover the rebuilding of that property. This determines the value of real property, even if this doesn’t always cover the value of the site.
However, you can close a policy for the building, a separate policy for the content you have inside your house or you can combine these two. The valuer will give you a written report with all the details regarding your property, and with this, you can go to the insurance company and close the insurance policy that you want.
There are many aspects that need to be taken into consideration when the property valuation is being made. If you want to know more about this, use our WA valuations company – Coobs and we’ll offer you a fair valuation!
Owning a house is an important thing in everyone’s life. In addition, everything that you do after you have bought your house is also important, because it’s all about creating your personal space where you feel comfortable and cozy.
One of the things that you have to do once you have bought the house is to close an insurance policy for the building, which is extremely necessary in case something happens, like a fire, an accident, if a tree falls on your house, theft, burglary or flooding.
This being said, our Perth house valuations specialists from Coobs know some tips that you can do, for maximizing both your comfort and the value of your house.
Adding another Room
If you have a house that can be extended, and if you also have the budget to do it, you can add a room to it. That room can be a bedroom or a living room, allowing you to transform the living space that you have available. If the planning of the house allows you, if you add a garage to the house, above it you can create another bedroom, this way increasing both the space and the value of the house.
People are looking for more living space that is available for them and their family, and if you can increase that space, you should do it for two reasons – the comfort will be bigger, as you will have more space, but also the value of the house will increase, along with the insurable value.
Adding another Bathroom
The cost of this remodeling can turn out to be high, but the comfort will be extreme. If you have only one bathroom in your house, and your family has more than two people, then you can surely think about this. All you have to do is find an available space – you can either transform a big room or simply add the bathroom in the attic or in the basement. Choose the cabinets that go there, a nice vanity, a mirror, a shower with a glass encrusted door and a lighting fixture. The toilet can be white or in a similar shade to the dominant color of the room. To make it seem luxurious, you can add beautiful details for the drawer pulls or for the cabinet pulls. Don’t forget that an entire wall covered in mirrors will make the room seem bigger than it actually is.
Creating an Outdoor Living Space
With a big yard, it would be a shame not to benefit from it. Other people would give anything just to have a small patch of land where they can have a chair and a table to drink their coffee in the morning or meet with friends in the evening. Having your own yard is a wonderful thing and you can create that space easily. Build a wooden platform, not very high, but close to the house. Create something like a terrace that connects the house with the yard. There you can place a big umbrella, two comfortable chairs and a table. This will be the perfect place for your free time and all you have to do now is accessorize it properly. Add nice colored pillows, lights for the evening and flowerpots. This will not only increase the value of your house, but you will surely love the place.
The Property Valuation
Once all these changes have been made, along other things that you have felt necessary to do, you can ask for a property valuation to determine the new insurable value of the house. Show the valuer the bills that you have for the remodeling that took place, and show him also the results. Once you get the written report, you will see that the insurable value was increased from the original value of the house, due to the remodeling that you have made.