Under or over-valuing a property could sabotage a legitimate deal and limit the full potential of an investor’s portfolio. Now with many property valuations becoming increasingly streamlined, it is even more important for investors to also form their own estimates. Today, it is common for valuations to come in under, or over market value, and the difference can be anywhere up to 25 per cent.
As such, investors need to have a clear understanding of how a valuation is conducted to be able to form their own estimate of how much their property is worth. To establish an accurate valuation, experts advise that landlords always do their own research. They can buy street sale history online, get an idea of sales in the area and talk to their local real estate professionals to get an idea of the market value of the property.
When investors do decide to pay for a valuation, they should insist the valuer visits the property and provides a substantial amount of market and comparable sales evidence to show how they’ve arrived at the value they’ve nominated.