If you’re in the real estate market, knowing how to estimate a property’s value may mean the difference between buying a property and making a great investment. Between real estate agents and media speculation, there’s a lot of conflicting advice and vested interests. The truth is, there’s big differences between price and value; a price is what you pay and value is what you get. In a rapidly changing market, knowledge and experience are your best defence against bad investments. We’re sharing our strategies to help you learn how to value a residential property.
Get To Know The Market
The golden rule to valuing property is research. Impulse investments rarely end well, so spend at least three months to get to grips with the local market. As a general rule of thumb, the more recent the sale, the more accurate the value, so don’t look back further than six months. Head to inspections and follow the properties all the way to auction, making note of how many days each property spent on the market. Make a coffee and sit down with the Sunday paper to track the results of recent sales, comparing the sale prices against asking prices. Knowing how to compare floorplans with floorplans will give a more accurate picture of where the property stands. If you’re nearing the pointy end of your research, it always pays to get an independent property associate to run their expert eye over the property.
Deep Dive Into Data
Sometimes the best way to move forward is to look back. Take a deep dive into property data by using sites like RP Data or PropertyDuo’s online estimate tool. When you analyse the results, take note of the property size, including land and living dimensions as well as the distance from amenities and transport. Location plays a huge role in a property’s value, so always check out Google maps street view. While data is great for painting the bigger picture, recent sales data is never going to tell you if a property is under a flight path or backing onto a main road. Median house prices are just that, a median, so they should really only be used as a guide. Bear in mind that more tightly held suburbs with less frequent sales can be statistically skewed, leaving you with unrealistic expectations.
When it comes to buying property, market value is essentially what you’re prepared to pay. Knowing what makes a property good value is a combination of hands-on experience and knowing how to use the tools to your advantage. Property valuation is a highly trained profession that takes years to complete and refine. To really understand the value of property, you need to know what goes into forming a valuation. That’s where a property associate can help. An experienced, independent associate can help you search, inspect, analyse and negotiate. An associate that lives and breathes property will know why number 37 sold for considerably less than number 25 and why number 11 is good value.
At PropertyDuo, we partner with you to help you buy a home you love and can afford. We aim to make your experience stress-free, save you time, and most importantly, ensure you make a smart investment.