The property market in Perth is packed with opportunities for real estate investors. A vast landscape of real estate exists; from family residential homes to industrial and commercial properties. Across the state, many have learnt how to profit through careful real estate investment.
A fluctuating property market and an overwhelming range of real estate options mean investors can benefit greatly from valuation services in Perth. Professional valuers help investors navigate a dynamic property market; giving them the insight needed to maximise investments.
Diving into real estate investment without the proper research, tools, and expertise can have detrimental consequences. The importance of using valuations to help manage an investment portfolio should not be understated.
What is a professional valuation service?
A professional valuation is a report prepared by an accredited valuer. For a valuer to be accredited, they must be a registered member of the Australian Property Institute (API); a governing authority overseeing the quality standards for property specialists across the country.
The valuation comes in the form of a report that is either in short-form or long-form. The scope and detail of the report will depend on its purpose, but the general goal is to provide a definitive and accurate outline of the property’s market value.
Understanding market value is critical for investors. It is the foundation for all decisions regarding the property; such as whether to purchase, whether to sell, where to add investment, and if they should be investing in residential or commercial property.
A valuation report from an accredited valuer also serves as a legal document; it is official proof of market value and can be used in a range of different circumstances.
The advantages of valuation services for investors
There are a range of advantages for investors who regularly use valuation reports to help manage their property investments. Some of the main benefits are:
The ever-changing nature of the real estate market and the range of factors that impact the economy mean that property investment comes with inherent risk. The insight provided in valuation reports allow investors to make informed decisions that minimise risks.
Financial and negotiation advantage
The objective and unbiased evidence of value that reports provide allow to investors to justify their position on pricing. Negotiations often move at a much swifter rate when parties have clear proof of market value.
Taxation and legal compliance
Real estate investment comes with a range of tax and legal obligations for owners. Valuations are often used to plan tax payments and guarantee consistent compliance with all legal obligations. Reports help investors avoid potential penalties and legal consequences.
Plenty of investors own multiple properties. This requires the regular monitoring of value appreciation and depreciation, identifying underperforming assets, assessing growth potential, and strategic planning to maximise returns. Valuations give owners the information needed to make informed decisions in this regard.
Financial lending support
When seeking financing for a property investment, valuation reports are often needed for financial lenders to outline the loan-to-value ratio. This ultimately informs the loan terms and guides the lender on how much financial support to offer.
What information is included in reports?
Description of the property
Basic information such as the address, a legal description, the size of the land, and a description of the physical characteristics including the number of rooms and the existing condition of the property.
A concise explanation of the valuation method or methods used in the report. It is made clear which method was the primary, and which ones served as secondary. Popular methods include the direct comparison approach, the income capitalisation approach, the net assets approach, and more.
A review of the local property market, covering market trends, comparable sales, economic conditions and more. The analysis of the market is key to determining the accurate market value of the property.
Notable restrictions or damage
Any restrictions or encumbrances that affect the property such as damage or faulty pipes or electrical work, zoning laws, easements, and anything else that may limit value.
Renovations and upgrades
Information on any recent upgrades or improvements made to the property that directly impacts its value. Examples include kitchen or bathroom renovations, upgraded flooring and cabinets, added storage or floor space,
A report may also include pictures of the property to serve as visual documentation of its existing condition. The photos are of both the inside and outside of the property.
The final market value of the property is based on a range of internal and external factors and the analysis via the chosen valuation approach.
An outline of the purpose of the valuation. The report must state whether the valuation has been prepared for legal, taxation, financing, investment, personal or other purposes.
In the wide landscape of Perth’s real estate market, valuation services serve as a useful navigation tool for investors in pursuit of new property. The objective evidence that valuation reports offer is massively beneficial.
A report is a reliable and accurate assessment of a property’s market value. Reports are prepared by accredited professionals who have a comprehensive understanding of the real estate market and what contributes to value.
The advantages that investors get from valuation services include a clear understanding of market value, assistance with financial lending applications, negotiation power, risk mitigation, and more. All in all, it leads to informed decision-making based on market data, physical inspections and objective evidence.
At Perth Property Valuers Metro, our team of accredited valuers have decades of experience and reliable knowledge of the market. To learn more about our valuation services, feel free to give us a call today.