Greville Pabst is CEO and Director of WBP Property Group, servicing clients around Australia. He regularly provides property value and market advice to corporate and private clients as well as the media. www.wbpvaluers.com Many people know the basics of what can impact the value of their property - overhead power lines and busy roads versus sea/tree views and a short stroll to the local coffee shop.
To gain a better idea of how to improve the value of your property, it is worthwhile taking a look at what a professional valuer looks for when inspecting a property and how they arrive at the valuation figure.
Many people know the basics of what can impact the value of their property - overhead power lines and busy roads versus sea / tree views and a short stroll to the local coffee shop. To gain a better idea of how to improve the value of your property, it is worthwhile taking a look at what a professional valuer looks for when inspecting a property and how they arrive at the valuation figure.
The field of property
The valuation process starts with a physical inspection of the property. The valuer walks around and through the property taking measurements and note of the number and type of rooms, fixtures and fittings, and improvements. The valuer then employs three methods to further analyse the property in order to come up with a value range: direct comparison, summation, and capitalisation of net income methods.
The direct comparison method involves researching recent sales of similar properties in the immediate surrounds, referred to as 'comparable sales'. The subtle and not so subtle differences are taken into consideration to determine the extent to which these comparable sales can be used as a guide to the value of the subject property. In this way, apples are compared with apples and necessary adjustments can be made for the bruises.
The summation method is the land value plus the depreciated value of improvements, which comprises the dwelling plus ancillary features such as garage, pergola and swimming pool. Land value takes into consideration size, shape, slope, location and surrounding infrastructure and amenities. The value of improvements incorporates the style, age, architectural features, layout, number and purpose of rooms, and renovations in addition to the overall appearance and condition.
The combination of these two methods allows the valuer to arrive at a valuation range. It is then up to the skill and experience of the valuer to consider any risks associated with the property or its location to be able to refine the valuation figure.
The valuer may also check these values by way of capitalising net income. This involves applying an investment yield to assessed market rental of the property to derive the current market value. This method is commonly used when valuing investment properties.
How To Add Value to Your Property
In addition to sweeping views and swimming pools, there are some other property features that can push up values. Architectural style is key and period homes tend to appreciate and hold their value the best over time. These homes are often unique and costly to replace. Some popular period styles include Federation, Victorian, Edwardian, Queen Ann and Art Deco.
From an internal perspective, the design and functionality of living areas, bedrooms and bathrooms are important. The following list outlines features that can enhance the value of a home.
- Period features: high ceilings, double brick construction, fireplaces and ornamental features
- Large, eat-in kitchens
- Two or more bathrooms (there is a trend towards larger bathrooms)
- Large separate laundry
- Large open plan living
- Relatively large block within 20 km of the CBD
- Close proximity to shops, schools and lifestyle amenities
- Quiet street
- Improvements such as outdoor entertainment area, swimming pool and extra bedrooms
- Generally neat and well-kept appearance both inside and out.
A warning, however, to property owners trying to improve the value of their home is to be careful not to overcapitalize. This means investing too much in the 
improvements of your property to the point where you stop adding value and risk not getting your money back when you sell. There is an old saying, 'The new king does not want to live in the old king's castle.'
Another important tip is to ensure your valuer has the skill and experience required to provide you with an accurate and reliable valuation. Only use a qualified and licensed valuer who maintains membership of the Australian Property Institute.
Valuations are required or useful for many purposes including property financing and refinancing, accounting applications such as calculating stamp duty, GST or capital gains tax, rental determinations for investment properties, and family law purposes. An independent valuation before you buy or sell a property can help you negotiate the best price, reduce your risk and save you money.
Interested in Property Development?
Give Metropole a call on 1300 20 30 30 to get a FREE report
"How to Get Started in Property Development."
Even if you know nothing about development, Metropole can take care of the whole project for you from concept to completion.
Click here for more details about their property development services
BUY THE NEW EDITION OF MICHAEL YARDNEY'S TOP SELLING BOOK
Click here to get full details and read the first chapter free.
Click here to buy this book s part of a book bundle and save $$$$
