Getting a good valuation on your investment property is the key to maximising your property investment portfolio. A favourable valuation will allow you to leverage your increased equity to fund more investment. So in this article, we are going to explore six ways you can improve the value of your investment property without spending any money.
Present your property in the best possible light
Presentation is the key to obtaining a good valuation. So make sure you show off your property in the best possible light. Start by giving the place a good clean inside and out. And remember first impressions count, so if your property has a yard, consider cutting the grass and tidying up the garden.
If your property is looking tired it may be worth sprucing it up with a fresh coat of paint and new carpets. But don’t go too far, remember this is an investment property and your valuer will know that. So there’s no need to bother with fresh flowers and putting a fresh cup of coffee on. Just focus on getting the basics right with clean walls, carpets and a nice presentable garden.
Preparation prevents poor valuations
Some valuers keep extensive records of property sales in neighbourhoods so they have a good idea what your property is worth before they arrive. But most are from out of town and do not. So it is always wise to prepare some relevant details about comparable sales in the area and present them to the valuer when he/she arrives.
It may also be worth contacting a few estate agents to obtain a valuation. These should be presented to the valuer along with a list of any refurbishment costs which have been carried out. This will make it much easier for the valuer to do their job and will greatly enhance the chances of you getting a more favourable valuation.
A word of warning here though. You don’t want to appear pushy or be perceived to be telling the valuer how to do their job. Just explain that you thought it would make their job easier if you provided some relevant information about recent sales in the area and leave it at that.
Set realistic goals
Before you get your property valued you should have a good idea what it is worth yourself. Property may be seen as a set and forget investment but it makes sense to monitor your portfolio’s performance by keeping a record of any recent sales. This will give you a good idea of what your property is worth. But remember to be realistic, make sure any sales are comparable to your property in terms of condition, size and repair.
Get your property manager involved
If your property is managed make sure to involve the property manager in the valuation process. Ideally, you should arrange a meeting with both yourself and the valuer. Because any good property manager will be able to provide relevant information about rental rates in the area, the availability of suitable properties and the potential for development.
Monitor the local market, explain anomalies
All neighbourhoods have properties which sell well below market prices. There is usually a good reason for this, such as dilapidated construction, untidy appearance or the property had been left unattended for some time. Whatever the reason, you should find out why and provide this information to the valuer. Because if they are not aware of the issues, they may use this property as a precedent for yours and give you a poor valuation.
Think your property is worth more? Get another valuation
Finally, if you obtain a valuation which does not meet your estimate, there is nothing to stop you from getting another one. It is not uncommon for valuers to miss something when valuing a property. So if you sincerely think your property is worth considerably more than the valuation, explain to the lender why and provide evidence to back up your claim. They should then agree to another valuation.
As you can see, obtaining a good valuation does not necessarily mean spending money on refurbishments. The key to getting a good valuation is good preparation and communication with the valuer. Provide them with the information they need to do their job and you will not only make their job easier but receive a more favourable valuation as a result.