Investments

What is real estate value? It isn't what you have into your house. It isn't what you feel it is worth. It is what the market will pay. How do you figure out what the market will pay? For single family homes, the best way is by seeing what similar homes have sold for.

Bank Of America Investment Figuring replacement cost isn't very useful. It's difficult to say what land is worth in a city center where none is left for sale, for example, and tough to gauge depreciation of the home itself. Valuation from replacement cost is used as a secondary method, and for unique homes that can't be compared easily with others. However, the primary method of real estate appraisal used for homes is a market analysis using comparable sales.

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Investment Opportunity Real Estate Value 101

Use this basic outline, and you'll be doing better than the average seller when selling your own home. Steve Gillman has invested in real estate for years. To , get a free real estate investing course, and see a photo of a beautiful house he and his wife bought for $17, 500, visit //www. .com Houses Under Fifty Thousand

Banc Of America Investment First find at least three similar homes in the same area that have sold within the last year, and preferably within the last six months. You can find this information is in county records (sometimes online now), or from a real estate agent with access to the multiple listing service. Make sure you have the basic sales information: sales price, terms of sale, description of the property, etc.

Real estate can be a wise investment but beyond purchasing a home of your own, what is the best way to invest in real estate without getting your hands dirty and spending your spare time chasing tenants for rent A REIT or Real Estate Investment Trust may be the perfect investment vehicle. REITs own, and often operate, real estate but are publicly traded like stock. Profit is paid as dividend to stock owners.

Banking Investment Here is how you use this information to find real estate value. Write down the selling price of your first comparable. Review the description item by item, adding to the sales price of the comparable for each thing it doesn't have that your subject home has, and subtracting for each thing it has that your subject home doesn't have.

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Investment Solution Strategic This sounds confusing, but it will make sense once you try it a couple times. For example, if your subject home has a second bathroom, and the a comparable doesn't, you add the value of the bathroom to the sales price of the comparable. If a comparable home has a blacktop driveway, and the subject home doesn't, you take the value away.

Many people fear owning a property, let alone owning an investment property out of state. However, as a true real estate investor, you must put yourself in the mode of a business owner. Real estate investment is a business, and like any business, it may come necessary for you to hire people to work for you. That's what realtors and property managers are there for. In order to really expand your real estate investing business, you must get comfortable with hiring property managers to manage your properties.

Investment Banking Services What you are doing is rectifying differences, to see what the comparable home WOULD have sold for if it was just like yours. Suppose a comparable sold for $140,000, with one less bathroom than your subject home, and a bathroom is worth $15,000 in your area (ask a real estate agent for help with these figures). You ADD $15,000 for the bathroom it doesn't have. You subtract, say $4,000, for the paved driveway it does have, that your home doesn't have. $140,000 plus $15,000, minus $4,000 gives you a comparable sales price of $151,000.

Bank Investment Do this with all differences between the subject home and each comparable. Once done, average the three comparable prices. If, for example, the three comparables now have adjusted sales prices of $151,000, 162,000, and 149,000, add the three figures and divide by three. The indicated value of the home is $154,000.

Alternative Investment All appraisal is an inexact science. You might only find comparables sold over a year ago, and have to estimate appreciation in the area. If a comparable sold with seller financing, you have to decide how much this affected the price. Still, for all of it's flaws, for single family homes this is the most accurate method for finding true real estate value.

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