How to Predict The End Value on a Property…
I have been investing in property for 12 years now and have done over 300 property deals.
In this article, I will be sharing with you my knowledge on how you can predict what the end value is going to be on a property.
If you are doing a property, let’s say, it’s a fix and flip or you’re buying it to add value and then refinance it, we call those BRRR, which stands for, Buy Refurbish Refinance Rent.
Let us say you buy property worth a hundred thousand pounds, fix it up and think, once this is done, it is going to be worth 200,000 pounds but then, a valuer down values it or if you’re trying to sell it, no one wants to buy it for two hundred thousand pounds!
That’s a problem because it was only worth two hundred thousand pounds in your mind!
The problem with many entrepreneurs is that they do tend to be optimistic and so, how do you be realistic rather than optimistic?
Approach three estate agents
When it comes to the end value, there are three things that you can do, the first thing you can do is when you’re first looking at the property, let’s say it’s an auction property, and you’re looking at it and trying to think, what’s the end value, I would approach three independent estate agents and say to them, I’ve got this property on church road what do you think would be the end value?
They’ll give you an idea but the problem with many property developers is that they’ll speak to the estate agent that’s actually selling the house.
They’ll tell you what you want to hear because they just want to sell you the house and therefore, the first thing you need to do is speak to three independent estate agents and get their advice because they know they’re going to have a better idea than any general person does.
I used to be an estate agent and used to work in great bar Birmingham, as I knew the great bar area really well.
Do your own due diligence
You can do this by, let’s say, you’ve got a property on church road, you go on rightmove.co.uk or any other related websites such as mouseprice.com, you look up sold houses in that street over the last two years and try to stick within quarter of a mile.
Now if there are no sold properties in that street or within a quarter of a mile, you can look up to half a mile but the further you go away from the house, the less like for like it is and you want to see what property has sold that’s similar to the property within quarter of a mile over the last two years.
If there is nothing that sold over the last two years, you may look over the last three or four years, but again, if you start looking at what happened five, six, seven, or eight years ago, that was a completely different market and house prices have changed as they do fluctuate.
Pay to have a valuer
If you really need to know, exactly what the end value is going to be is pay a few hundred pounds to have a valuer go out to the property and tell you what the end value is going to be.
They’re going to tell you based on the quality of the refurb and so, they might say, if the refurb’s to a really high standard, the value is going to be 200,000 pounds.
It’s important to get an idea of what kind of quality the refurb needs to be done but that’s the third way and if it’s a big project, and it’s you know, potentially a unique property and you’re putting a lot of money and a lot of risk into the deal, always get a valuer to go out and tell you what they predict the end value will be.
Book Your FREE Place at the Property Investors Crash Course: https://property-investors.co.uk
Share this video: https://youtu.be/iVH09qTrTNo
🎥 How to build a property portfolio from scratch in 7 DAYS: https://youtu.be/RWEkj1y8XKs
📖 My favourite book: https://amzn.to/39VcYLa
❓ Have a question about property? Join my Property Facebook Group: https://www.facebook.com/groups/77861…
🗣️FOLLOW ME ON SOCIAL MEDIA:
Facebook Group: https://www.facebook.com/groups/77861…
Facebook Page: https://www.facebook.com/OfficialSamu…