What Is the True Value of Your Investment Property?

by | Apr 4, 2021

Like a fine wine, the value of property gets better over time. Traditionally, the more time you have an investment property, the higher the value will rise.

However, unlike your favourite Shiraz, property values can go up and down, and up again. 

Getting to know how, why and who is valuing your property can help us understand what property to invest in. 

There are three ways to value a property – and three very different people doing the valuing.

THE VALUE HISTORIAN

The value historian is assessing the value of your property based on the past, what has come before. They look back at what was going on in the market three to six months ago and make a valuation based on what the property is worth if it was sold today, or in the next 30 days. What would it make based on the past?

Value historians work for the banks, the lenders. Their primary role is to protect the lender’s money. They have no real interest in what the property is worth in the future, or what the market projections are. 

This is important to remember if a valuation comes in low, but you still like the property. Remember, as a smart investor, you’re looking at the long game, not what happened six months ago.

THE PRESENT VALUER

Other than the owner, the next person who is most motivated to sell a property is the person who values it in the present, what it can or could sell for right now. And that’s the agent.

Real estate agents, quite fairly, are motivated by money. The more they sell a property for, the higher the value, the more commission they get. That’s their job.

Agents are in a prime position to value a property based on what is happening in the market right now. They are getting phone calls every day from people wanting to buy and sell, so they can get a real sense of what kind of property is in demand and what might sell for more than the lender thinks the property is worth, based on market demand. 

This is where agents can be helpful when looking at the value of a property. While the bank or lenders say the property is only valued at $500,000, talk to an agent with their finger on the pulse and they could estimate they’d get $550,000 based on their insider knowledge of the market activity.

THE FUTURE VALUE

This is the important valuer – because it’s you! The investor. The one who’s in it for the long game and has a plan and strategy and an end goal, whether that’s a shorter working week, or a new car every year. 

Smart property investors do their numbers before they buy and know what they need a property to make in rent return and capital growth so that they can achieve their goals.

When it comes to valuing your property, you have to decide what the future value will be and what needs to happen to achieve that increase. For example, does the property need to be developed to reach its value potential, and if so, are you willing and able to do that? Make sure the property is going to work for you and your investment strategy.

UNDERSTANDING THE RULES OF SMART INVESTING

Let the experts at Positive Real Estate teach you how to value a property at one of our free property investing seminars. Plus learn all of the ins and outs of smart property investing. 

Sign up for one of our information and education events, where you’ll be equipped with the tools, resources and support to thrive, and not fall behind on your path to financial freedom – whatever that may look like for you. 

Book your spot now and find out what you need to know about the current market landscape and how you can make it work for the ultimate wealth creation opportunities. 

 

Book here

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Turning $80k into $800k

Turning $80k into $800k

Welcome to the first episode of Property Investor Tales – Stories From The Front Yard!

Each week I get to speak to property investors from around Australia about their investing journeys. As the head of coaching at Positive Real Estate, I’ve been fortunate to connect with thousands of investors who have a story to tell. My hope is that from these incredible investors, your own investing journey is made that little bit easier. 

Abe Pasilidis is my guest today and he has an inspiring story to tell. I won’t give too much away but listen out for an $80k investment has turned into $800k, plus a hilarious story of property management gone wrong (when you DIY). 

Enjoy this conversation with Abe!

Once you’ve listened to this episode, I’d love it you hit the subscribe button  so you get notified every time a new episode drops. 

As you can guess I love hearing people’s property investor tales so if you’d like to share yours then please get in touch with me via email at  propertyinvestortales@positivementor.com.au You can watch all of these podcasts over on YouTube at Positive Mentor or at positivementor.com.au
Today, I am talking about some key lessons I learned from Dr. Andrew Wilson, a housing economist and a funny bloke. He is a member of the Chartered Surveyors Community, a wealth of knowledge, and a voice of reason when it comes to real estate investment. I’ve adapted his predictions into my strategies and share them with you today!

The Biggest Lie of Investing Revealed

The Biggest Lie of Investing Revealed

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Today, I am talking about some key lessons I learned from Dr. Andrew Wilson, a housing economist and a funny bloke. He is a member of the Chartered Surveyors Community, a wealth of knowledge, and a voice of reason when it comes to real estate investment. I’ve adapted his predictions into my strategies and share them with you today!

20 Investing Lessons from COVID-19

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A Property Investors Guide To Guaranteed Rental Increases

A Property Investors Guide To Guaranteed Rental Increases

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My Real Estate Pet Hates

My Real Estate Pet Hates

This episode is about all of the things in the real estate community that piss me off. From investors consulting clickbait on social media to predatorial real estate agents giving themselves fake awards, we are going to talk about everything that is wrong with the real estate industry that you need to know about as a property investor. Hopefully, after listening to this you will be able to avoid some of the most common pitfalls that property investors fall into during their wealth-building journey.

Why Do You Want to be Financially Free?

Why Do You Want to be Financially Free?

Will you survive the emotional roller coaster that is property investing? It takes time, money and commitment to create a portfolio, but sadly most who start out don’t make it, why? Well, let’s Wealth Coffee Chat!

The Only Time You Should Sell An Investment Property

The Only Time You Should Sell An Investment Property

The golden rule of property investing is to buy well and NEVER SELL. However, there are always exceptions to the rule… Firstly, let’s look at why you would keep an investment property? If you buy a great piece of real estate, in the right location, it will always create a passive income for you, so there will be no reason to sell it.