In this two part site I’ll look at a professional valuer performs a valuation on a property, what challenges they confront, and, significantly that knowledge can be used by property investors to their advantage.
WHAT’S AN OFFICIAL PROPERTY VALUATION?
Quite simply, a valuation is the estimated market value of the property based on what it’d sell for under ordinary conditions where the purchaser and seller are acting on the exact date of valuation and without undue pressure.
The dissimilarity between proper valuation as well as a market assessment (usually done by a property agent) is that a proper valuation can simply be done by a competent valuer with the prescribed instruction and training.
An assessment is supposed to be more of a guide to just what the property may bring if it was sold, based on recent sales signs and local wisdom.
There are a number of various kinds of valuations, including a Kerbside Valuation, which calls for no internal review of the property, only a ‘driveby’, as well as a Desktop Computer Valuation, which only contains research.
Nevertheless, let’s focus on a Complete Valuation, which includes the valuer undertaking a complete review of the property, including an internal review.
Most people desire financial freedom as well as the extra picks in life this brings, yet most people never attain financial autonomy, despite living in one of the most affluent nations in the world when you consider it.
ACTUALLY MOST RETIRE ONLY ABOVE BROKE
The most recent Wealth Report estimates that there are less than 180,000 high net worth people, super retirement superannuation saving elderly old yet the urge to get out of the rat race, to have more choices and to develop financial freedom is the main reason many start their very own small business and give up their jobs.
Yet very few truly make a fiscal success of it. Yet 92% of property investors own never get to own more than two properties and six properties are owned by less than 1% of property investors.
SO THE INCONVENIENT TRUTH IS THE FACT THAT THE MAJORITY OF PROPERTY INVESTORS NEVER ACHIEVE FINANCIAL FREEDOM EITHER
Interestingly of these high net-worth individuals quoted in the Merrill Lynch survey, close to 80% created their riches as business owners. Most of the others were employees with strong fiscal discipline and who invested prudently, and there was a smattering of high-income earners such as sports and celebrities folks who had also invested wisely.
Hence let’s clarify this – most company owners, self-employed people, employees and property investors never become free. And of those who do achieve financial freedom the bulk are successful business owners. Then there is a substantial amount who treat their investments like a small business and are employees. What it all boils down to is that one of the best approaches to bring in more and work less is by having a business, because the “the tax system” favors business people and disadvantages workers.
Successful business owners understand the system of the law, tax and also finance and have it working for them. They realize that it’s not how much cash you make that’s essential.
It’s how much you keep that counts and how difficult that money works for you.
The typical employee pays tax earns money and spends what is left over; while a business owner spends money brings in income and pays tax on what is left.
1. Buy a property that will interest owner occupiers. Where you don’t actually need to follow the bunch” of newbie property investors this may be especially significant in the present more mature phase of the entire property’s cycle.
2. Buy a property below its intrinsic value – that’s why I avoid new and off the plan properties, which come at a premium price. Strategy
3. In a place with an extensive history of strong capital increase and that can continue to outperform the averages due to the demographics in the region.
4. An area where more owner occupiers will want to live because of lifestyle choices and one where the locals will be prepared to, and can afford to, pay a premium price to live because they have higher disposable incomes.
5. I’d try to find a property using a turn – something distinct, or specific, exceptional or rare regarding the property, and eventually… a property where I can make capital increase through renovations, refurbishment or redevelopment as opposed to waiting for the marketplace to deliver me capital increase.
I minimize my threats and maximize my upside by following my 5 Stranded Tactical Strategy.
Each strand represents a style of combining all five and earning money from property is a strong means of setting the odds in my personal favour.