Property valuers are gonna be talking about something really important in the real estate world which is how do you value a property? How do you evaluate a property?
And you know what, there’s gonna be different Property valuation methods for doing that depending on where real estate valuers are at in the market cycle.
Is the real estate market in a bubble? Did it just pop? Are Property valuers in a trough? Is it in a comeback? That’s gonna play a huge factor. In this blog valuers are gonna explore the two major Property valuation methods for how valuers evaluate properties.
How, do you know if a real estate property is worth investing in or not? What would make it a good deal or bad deal? Real estate will, if it’s inspected and if it’s certified by somebody.
I think you need to investigate first what is the place and depending on that and the information that you get, you will be able to know. What is a property really worth?
Property valuers will, I’m gonna tell you right now it depends on where valuers are at in the market and there’s two different major Property valuation methods that you wanna be familiar with.
And I’m gonna share them with you right now. First of all, when real estate valuers are talking about what something is worth, let’s get some of the facts straight. Real estate over time always does WHAT in value? It goes up in value but I think Property valuers are all pretty clear that it doesn’t work this way
And let me draw it a little bit different here and exaggerate this drawing. Real estate over time has these things that real estate valuers call bubbles and it has these things that valuers call troughs.
And I wanna give you a little bit of history on this because you’re gonna evaluate your properties different in cash flow markets as you are in these troughs. And I want to throw out this little disclaimer with the right strategy, you can make money in both of these markets.
If you got the right strategy, it doesn’t matter what the market’s doing, but you do have to know how to value a property. So real quick little history lesson is right.
now if you’re taking a look at the great recession that America is in right now, this is a pattern that has happened before. Every years, Property valuers have this market crisis. Last time it was called the Great Depression, happened in the ’s.
When the stock market fell apart and real estate follows hand-in-hand with it, the real estate market fell apart. The economy can’t sustain building new homes. So what ends up happening is real estate valuers experience a crash, things hit this low.
But I want you to understand something You can’t stay here very long in real estate. It’s very predictable. Population continues to grow, people make babies, and after maybe a few years, it’s required for us to start building again and that’s what brings us back into the market.
Now real estate moves slow. Every years, Property valuers have a major trough but every years, valuers are experiencing some type of recessional trough. This is important to understand if you’re really wanting to understand how to value real estate in these markets.
Now just a fun little bonus side thing, population was growing around .% during the Great Depression. And it took five years for the market to recover.
Meaning, five years of that kind of growth rate and real estate valuers had to start producing real estate. So even though real estate was at a low, it was forced to come back up to what Property valuers call the rebuild value.