Are you curious about what your South Atlanta rental is worth? With the right buyer, your property is whatever the individual will pay for it. Realistically, the worth of your property depends on the market and can vary according to the expert opinion of an agent, lender or tax assessor for your county.
Not so straightforward, is it? Which makes calculating rental charges and your financial goals more complicated. However, you can find the value of your South Atlanta rental by considering these four guidelines.
1. Conduct an Online Valuation
Many homeowners use automated valuation models (AVMs) to determine the value of their property. These online valuation tools are estimators offered by real estate websites (think Zillow or Redfin) and by lenders. However, limited data can make the accuracy of the results questionable.
You should cross-reference your online valuation with tax assessments, deeds of ownership and property transfers. These are public record and legal for you to access. Research listing prices in the neighborhood and local area. With a little quantitative modeling, you can use these tools to estimate your rental’s worth.
2. Obtain a Comparative Market Analysis
Online valuation tools help you scratch the surface. Ready to take a deeper dive into researching your rental’s value? Ask for a comparative market analysis (CMA) from a nearby real estate agent.
It’s not the same as a professional appraisal, but you do receive the experienced agent’s evaluation of the property and its estimated value as if it would be listed on the market.
3. Get Scientific With The FHFA Housing Price Index
A more scientific version of AVMs exists in the Federal Housing Financing Agency (FHFA) Housing Price Index (HPI).
More acronyms equals more science, right? No, but the HPI is federally-backed.
The index utilizes the repeat sales method to track how a property’s value changes as it is sold and bought over time. This data is used to estimate how values themselves fluctuate in particular markets. The FHFA’s mortgage transaction data history goes back to the 1970s.
4. Hire an Expert Appraiser
You can hire an expert appraiser at any time to value your home. They will check the market (the neighborhood, city and region), property characteristics (improvements made and land) and comparable properties (vacancies, listings, depreciation and more of similar properties in that market).
5. Compare Apples to Apples: Use Comparable Properties
Many property owners use comparable properties to gain insight into the value of their property. This technique utilizes an “apples to apples” comparison, not apples to oranges.
The house next door is not completely comparable to your property. Don’t forget about the land or any improvements made to the property.
Spa-style tubs, deck additions and sunrooms tend to have a negative impact on home value, while new vinyl siding or a garage door replacement adds value. A new garage door weatherizes the home, saving money on the utility bill, and can be a barrier to entry for home invasion, where a sunroom adds aesthetic value. Amenities do offer value, but comparable properties should have comparable amenities in order to accurately estimate value.
Look at properties that have already sold, instead of going off of a listing price. Is the size of the property the same? In what condition is the property? Asking these questions will guide you in making the best possible estimate.
When you determine your property’s value, you gain greater control over your financial and business goals. Additionally, you can always appeal property taxes if your assessment can prove the cost is too high.
You will charge fair rent and meet your future goals as a property owner. Contact us for more property management tips.
