Is Your Property Worth it? (A Beginner’s Guide to Assessing Property Value)
Knowing the actual worth of your property allows you to maximise the profit potential of your portfolio. Learn how to assess a property’s value for you to make the right investing decisions.
Let’s say you have a property you want to sell.
You thought of doing it in September of 2022, but you held on to the property in hopes that the property values will still rise. But come December 2022, the value of residential properties fell by $27,000.
Would that potential profit you’ve lost make you feel bad that you held on to your property for too long?
Of course, it would.
This is the reason why property investors and developers should learn how to assess the value of their properties as it relates to the movement of the market. In doing so, they can make the right decisions when it comes to selling or leasing a property for profit. It’ll also help when you’re negotiating to buy a new property.
Fortunately, there are tools you can use to find out how much your property is worth. And this article will discuss four of them in detail.
4 Tools To Help Determine Property Value
Many tools can help you determine the value of your property. While these tools will still give you estimates, those are still near-accurate figures because they’ll rely on current market data.
Here are four of those tools you can leverage:
Tool #1. Look at Similar Properties
One tool to use is a sales comparison of similar properties.
So, take note of the specific features of your property. These include the livable square footage, lot size, location, number of bedrooms and bathrooms, age of the property, and structural condition. Include other features like swimming pools, garages, etc.
Once you have the data, go to property sites and search for recently sold properties with the same features as yours. Check out the price by which these properties have been sold.
Then, pick three properties with features that are nearest to yours. Calculate the benchmark price by getting the average of these three properties. Feel free to add and subtract values, depending on noticeable differences.
The number you came up with can be a safe estimate of your property’s value.
Tool #2. Look at Price Predictions
For this option, you’ll be relying on trends and historical data to determine your property’s value. After all, property values are generally predictable. If you know what signs to look out for, you can predict whether the values will rise or fall in the coming months.
For instance, house values typically rise over the years. However, some instances can affect that growth, like recessions or natural disasters.
The law of supply and demand can also affect property values. If you look at the supply and demand in the surrounding areas of your property, it becomes easier to make the right assumptions about the value of your property.
Tool #3. Seek Professional Help
A great way to learn about your property’s value is through the help of professionals like real estate agents, property appraisers, and tax assessors.
Real estate agents use a Comparative Market Analysis (CMA) for this. They analyse similar properties sold within the same area as yours to determine the fair market value of your property before having it listed.
Meanwhile, property appraisers will give you the appraised value of your property. While more costly, appraisals provide a more comprehensive analysis of your property’s worth. It considers the location, size, conditions, and renovations done on the property.
County tax assessors can also be of help, as they will calculate the assessed value of the property in dollars. They do this for property tax purposes. But it could give you an idea of your property’s value just the same.
Tool #4. Use Online Calculators
Often, you’ll find property calculators on property listing sites. These calculators use algorithms and publicly available data to assess the value of a property. They look at recent sales, property features, market activity, tax assessments, etc.
Among your options includes Zestimate from Zillow, MyHome from Realtor.com, and home value estimator tools from Chase, RE/MAX, Trulia, and Redfin.
Note that they can give a rough estimate but won’t consider any renovations done on the property. So, if you plan to use online calculators, you may need to adjust the figures to make them more accurate.
Get a Free & Accurate Property Estimate with Archistar
When in doubt, you can always get a professional to help you calculate the worth of your property. You can pay an appraiser to do it for you or even get it done for free when working with a real estate agent.
But if you have plans to invest in more than one property, it’s more practical for you to learn how to assess your property’s value on your own.
Fortunately, the free version of Archistar has a Price Estimator tool you can use anytime. Use it to know your property’s value while saving time and money in the process.