Let’s say you’ve owned your investment property for a number of years. You’re not planning on selling it any time soon and the property is happily ticking along with good tenants in place and no maintenance concerns.
Is there any point in getting this property revalued?
I think you should – and here’s why.
In my view, it’s advisable for investment property owners to get new valuations completed on their properties every few years. In fact, investors should look at their financial situation every three years.
It’s important to be aware of the current value on your properties, as well as the loans on your properties. While appraisals from selling agents can give you a piece of the picture, valuations give us a more detailed and realistic overview of your investment’s real market value.
A valuation is a price derived from a comprehensive report, which includes an assessment of land value, improvements you have made and depreciation since construction.
It also includes sales comparisons in the area and any town planning issues that could impact the value of your property, either positively or negatively.
The reason I suggest you should have a valuation performed every three years is because it can help you make a range of decisions and could potentially unlock thousands of dollars in equity.
For instance, if the property price has risen and given you substantial equity, it may be time to refinance so you can use those funds to reinvest in another property.
Alternatively, you may be able to unlock some funds to renovate. As a side note on renovations, if your property isn’t increasing in value, there doesn’t seem to be much point in spending more money on it. We find that it is demand that raises prices, not renovations. Often, once a renovation has been completed, there is little gain to be made from it. In our opinion, the point of a renovation is to get a percentage return on the job, not just an increase in the value of the renovation.
Or, if the value of the property is not increasing and is failing to make any capital gains, then you may decide to sell the property and invest in a different area where there are capital gains to be made.
None of these options are on the table until you do a property valuation, as it gives you the power to make informed decisions.
If you fail to organise regular valuations on your properties, then you may be missing out on valuable opportunities to grow your wealth. I encourage you to keep up to date with all your property valuations for the sake of your property investment portfolio and your future financial prosperity.