Real estate is likely to be the most significant expense any of us make, so when you’re getting ready to enter a transaction, it is critical to understand the value of your property. Whether you are buying, selling, or investing, a property appraisal offers a range of insights that not only ensure a fair price is being set, but also helps with other related expenses and processes, such as your monthly repayments with current home interest rates, property depreciation, and garnering new ideas on how to add value to your property.
Real estate value estimates involve developing an opinion of a house’s or unit’s market value. So why is it so important to know your property’s value in the current real estate market? Our experts at Noel Jones explore this in more detail.
1. Determining Property Estimated Value
The most obvious benefit of working with a home value estimator is to determine an understanding of how much your property is really worth in today’s market. This is essential for various reasons, such as setting a selling price, understanding your net worth, and even for tax purposes. An accurate property estimated value is the foundation of any real estate transaction and is needed for obtaining mortgages or refinancing your home.
2. Home Interest Rates & Mortgage Refinancing
With home interest rates constantly front of mind today, knowing the value of your property will impact your ongoing repayments and interest charges. Naturally, the value of your property, against other factors like the size of the deposit you have available, will influence the degree of risk seen by your lender. As such, knowing your property’s value can help you plan your finances better.
Moreover, if you are considering refinancing your mortgage, your lender will likely require a property appraisal to determine the current value of your property and to assess the risk involved in the loan. The appraised value will affect the terms and conditions of the loan, as well as the interest rates.
3. Property Depreciation
While not available for residential homes, a key benefit of property investing is the ability to claim depreciation. The value of a property can decrease over time due to factors such as wear and tear, changes in the market, or even environmental factors.
An appraisal will give you an accurate picture of your property’s current condition and its depreciation rate, which will help you make informed decisions about whether to invest in repairs or renovations. It will also help you to create a depreciation schedule that can help you potentially write off thousands of dollars each year against your rental income. Be sure to also work with a qualified Quantity Surveyor and tax accountant to better understand what you can claim.
4. Adding Value to Your Property
You might be surprised at what a few well-placed upgrades and sweat equity can do for your property’s future asking price. A property appraisal can guide you on how to add value to your property and increase your return on investment. Your appraiser will work with you to identify areas that need improvement or updating, and you can use this information to make necessary changes. This is particularly important if you are considering selling an older property, or trying to make it more competitive in a crowded rental market.
5. Obtaining Appropriate Coverage with Your Property Insurance
Whether you are an owner-occupier or a landlord, having the right insurance policy in place is critical to protecting your investment. The amount of property insurance you need is based on the replacement cost of your property, and an appraisal will provide an accurate assessment of the potential expense required to restore both external and internal features in the event of a disaster.
Work with a Trusted Home Value Estimator to Find the Right Price for Your Property
Having an accurate home value estimator will help you set the right selling price, ensure you receive the best rental rates for your investment, and help you organise your financial position. It can be tempting to simply guess a higher price and hope for the best, but an overpriced property, for example, can sit on the market for a long time, which can ultimately result in a lower selling price. On the other hand, under-pricing your property can lead to a quick sale but at a loss in potential gains.
Noel Jones can help bolster your property with an accurate estimated value. With years of experience representing Melbourne’s eastern suburbs houses for sale, we are certain we can help find the best outcome for any property you would like to sell or rent in Yarra Ranges, Bayswater, Doncaster and surrounds.