In this post, we will answer the most common property valuation questions so that you can be confident when you reach out to your property valuer.
Why do I need to have my house valued on a regular basis? Property valuations in Brisbane are a complicated topic, but they play an important role in how you manage your investment. While some homeowners may not be concerned with what goes into these calculations, others want more information about their value so that they can make informed decisions based on accurate data. If you fall into this second category or just want to know more about what’s going on behind the scenes of your current valuation report, read below for answers to the most common questions regarding property evaluations!
There are multiple methods used in property valuations
- Comparison
- Profits
- Residual
- Contractors
- Investment
A property valuer can use one or more of these methods to calculate the true value of the property, depending on the type of property, commercial or residential.
Comparison Method
Most commonly used, for property types such as houses, shops, offices, and standard warehouses.
Profits Method
If there are no comparable rental/sales transactions available this method can be applied. Used for pubs, hotels, and nursing homes. A favoured method when lacking any comparable variables to determine value.
Residual Method
Property that can be valued with development potential or vacant land that’s current use is being changed to become more profitable.
Investment Method
Used to determine the market value of a property that is in a freehold/leasehold assessing its potential to generate future income.
Contractor Method
A cost approach method of valuation depending on the situation and the type of property, if the comparative, profits and investment methods cannot be used. This method is referred to as the “last resort”.
Having an understanding of the multiple methods used to value a property is essential. For buyers, a property valuation can reduce the risk of purchasing a property for more than its true market value.
For sellers, there are multiple ways to benefit from having a valuation including having an idea of the potential selling price and learning of opportunities to make any improvements to add value to their property.
Property valuations can help in all manner of property-related circumstances. To get the help you need to make informed real estate decisions, call a local property valuer service today.