Welcome to property valuation, this blog is meant to introduce the business student or the property student to the whole area of real estate valuation.
Real estate valuation appears to be something fairly straightforward most people think that they’ve got a good idea of the value of their own house or perhaps the value of an office block or what-have-you but to get a precise professional opinion.
Which will be able to stand up in court is the work of a property valuation specialist professional turns out that property valuation is really the cornerstone of any professional activity that deals in property and so once you have mastered some of these skills.
You’ll be able to move out into other areas where you use
property not just as a property value but as property valuers a property
manager a fund’s manager the slim unit manager in fact quite a wide range of property
valuation specialist jobs which are in the business community but require a
particular understanding of the way that real estate works.
Property valuation is probably one of the most curious
things in our economy today in Australia real estate is everyone’s dream
everyone wants to own their own home everyone believes that by doing that some how
they’re going to ensure their financial and economic security into the future
to be a property value means that you need to understand the psychology.
And the behavior of the market and the people that are in it and this is one of the issues that property valuers begin to look at in this blog as well as that we started to look at exactly how property values do actually put a reliable and property valuation on the properties that they inspect and value turns out that there are a number of methods of doing it.
Some of them are fairly straightforward you’ll find some of
them can be enormous complicated and require quite high-powered computer
modeling property valuers might be doing very much of the high-powered computer
modeling in this blog what we will be doing though is introducing you to the
spectrum of property valuation methods that are available.
And also giving you the experience of valuing a residential
property which turns out to be one of the most straightforward to cut your
teeth on I think most people will find this blog a very good introduction to
property if you are intending to become a property valuers.
You may want to use this blog as the foundation for your further property valuation in statutory valuation advanced valuation and especially a true or valuation if you’re doing this blog because you’re pursuing a business degree.
You may find that understanding a property will help your
skills in any business a little bit further because when you think about it
there’s just about no human activity on earth that doesn’t involve real estate
in some way.
So while most of us might think of real estate as being the
Forte of the local real estate agent once little bit deeper property valuers
find that every shop every factory every farm is located on a block of land and
the value and the management of that block of land.
And the improvements on it can be a very important part in
managing the profitability of the businesses that are on it and there is this
complex interplay between them well we won’t be covering all of these issues in
this blog at least hopefully property valuers will be able to whet your
And show you the way that property is a little bit more
complicated than simply the elementary notions of supply and demand that most
people think are the be-all and end-all of economics one of the other curious
things about real estate.
And we’re going to be looking at this as property valuers move through into the theoretical models sorry the theoretical property valuation modules is that real estate is one of the most peculiar items traded in the economy.
Because it has no real cost of production at least the land component while the houses may require or the factories may require.
And builders and tradesmen and so on to put them together
the land itself is something we’ve simply inherited from the past in some way
and yet in many property valuation markets especially in the major cities the
land component becomes the most important.
And most valuable will be showing you the way there’s
actually the land component that increases in valuable value even as property valuers
sleep whereas the built component behaves the way that anything else does
eventually it becomes less and less valuable to a point.
Where most people would prefer to see a bulldozer run
through a old decrepit house or a old warehouse or factory then try and
actually occupy it themselves this complexity with real estate makes it an
extremely interesting asset to property valuation from the economics point of
view of blog.
There has one component that at least in Australia is
perceived to be the most robust investment asset available and on the other the
improvements are in some way all the time wearing our needing improvement or
certain extent they determine the kind of tenants.
That you might have as an investor I hope that you do find some of these issues of interest many people who have done this blog have gone off to very satisfying.
And important property valuation in the property area not just as valueless as property valuers have gone over but also you will find that even for your personal life a good understanding of property value and the dynamics be commended it’s very important in securing your own future.
An appraiser from an agent and property valuation are two quite separate documents their design to do two different functions an appraiser permanent agent has its place obviously as a marketing tool and it enables the agent to then be able to sell the property on the basis of the appraisal.
However property valuation from a value it can be used to rely on in the case of secretary reporting requirements any legal requirements that need to be met
And it will hold weight as a document in a court situation the property valuation is also designed to provide you with what the actual sale price of the property would be based on the value.
As own investigations rather than an appraiser which may be the price that an agent would start marketing the property at an independent property valuation also gives you the peace of mind knowing that the valuation report has been carried out by a senior commercial property valuers who is able to research the sales evidence.
And provide you with the document which is completely independent and also enables you to make an informed decision on the basis of the information contained in the document a residential property valuation report typically provides URIs all the information.
That you’re probably already well aware of we look at things like construction type age of the home environment surrounding development accommodation standard of internal fixtures fittings.
And chattels special features any minor necessary repairs will also speak to the counts or to ascertain the current zoning of the property to see what effect that actually has on its development potential certified property valuers also provide a narrative general comment section.
But most importantly for the majority of our clients is the sales evidence section where property valuers provide a fairly comprehensive analysis of the most recent relevant sales which have occurred in the immediate locality.
And a value of comments about each of those properties in relation to your property from that analysis you can then understand how the residential property valuers has arrived at his assessment of value the methodology he’s used.
And the basis for the valuation a residential property will typically take between three and four working days from inspection to complete registered property valuers will need to arrange an appointment time to go through the property which may take anywhere from half an hour to one hour depending on the size age.
And location of the property from there the value licensed property valuers will need to inspect the sales evidence properties analyze the data write-up is report and then provide you with a bound document.
We can to expedite the process email you with an electronic copy and the original will follow in the mail we regularly carry out retrospective or backdated property valuations for our clients particularly the capital gains tax assessment.
But also for estate settlement for matrimonial disputes in these circumstances qualified property valuers need to obtain information from our clients as to the condition or changes in the property subsequent to the relevant date any photographs or plans or written information.
You can provide us with our exceptionally helpful the valuable then inspect the property and based on the information provided by your property valuers will carry out evaluation at a back dated date property valuers look at sales of similar properties which occurred close to the relevant date.
And also make allowances for the condition of the market at that time all of that information is then documented in our report to provide you with a document which will stand up and be accepted by the ATO or any other government authority for any statutory reporting an insurance valuation is a report.
We look at things like replacement of driveways and letterboxes patios pergolas removal of debris in the case of catastrophe or demolition in the case of partial damage.
Professional property valuers also look at the cost of relocation any increases in building cost over the construction period any loss in rental income or the cost of finding alternative accommodation during that construction period the report is fairly comprehensive.
Which provides you with a costing not just of the replacement of the shell building but also other factors which recommended by both the Australian Insurance Council and the Australian Property Institute.
And each of those things is itemized within the body of the property valuation report so that you can then mix and match to your insurance policy to ensure that you are properly covered an appreciation property valuation is provided to our clients who then have a suitably qualified accounting professional undertake a depreciation schedule on the basis of the information government approved property valuer provide them.
With we look at what the construction cost was of the building at the date of construction and the cost of other items which can be depreciated within the home in the case of a home which is older and may have had been already been depreciated.
We can also provide you with the cost of items such as renovations or extensions which can be depreciated over the period of their life property valuers also look at the cost of replacement concerns such as hot water systems and air-conditioning units which may have some life left in them.
And government approved property valuers look at what the installation cost was of the item at the day that was placed into the home from there your accountant or another suitably qualified professional can prepare a depreciation schedule for the ATO on your behalf our values are not affiliated with any real estate agency or financial institution.
They are all members of the Australian property Institute which is the peak body for valuers throughout Australia they’re also licensed are registered in the relevant state in which they practice as those members of the Australian Property Institute.
And under their licensing or registration they need to adhere to a strict code of conduct and guidelines as well as legislative requirements in order to ensure that they are completely independent and that their opinion is based purely on the evidence that’s available and their analysis of that data.