Unfortunately, there is no special book for property investors to look up the cost of a specific property before investing. Therefore, you need to know how to estimate the market value of your potential property investments. With the help of the Internet, it is simple to get a rough estimate of the current market value of any investment property.

What Is Market Value?

Market value is the most likely price that a property will bring in an open and competitive market. There is a difference between a property’s appraised value and the tax-assessed value.

The appraised value of a property is the estimated value as determined by a licensed professional who uses the proper methods of appraisal for your property type. The tax-assessed value is the value of the property according to the local taxing authority, including any improvements to the land for property tax reasons.

Comparison Sales Strategy

The comparison sales strategy for determining current market value on an investment property is based on the recent sale prices of surrounding properties that are of the same quality, size, etc. In order for this strategy to work properly, you must make adjustments for properties that were sold at unrealistic prices or under terms that may not be available to all investors.

Income Strategy

The income strategy can be used to estimate the worth of a property that will produce income on the basis of the net income produced by the property. According to this strategy, the current property value can be determined by using the capitalization rate, which can be calculated by dividing the annual net income of the property by the purchase price. You can also use the gross rent multiplier by dividing the purchase price of the property by the monthly gross income that it produces.

It is important, if you plan to be a successful investor in the real estate market, to know how to accurately determine the current market value of any potential investment property. Take the time to learn these methods, to ensure that you do not fall victim to overpaying for your investment properties.

Property Options Australia
Property Options Blog © 2006 - 2009

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One of the greatest rewards you will discover when you invest in the property options market is that you have a plan. With the traditional methods of investing in the real estate market there is no real plan of action. That is something that you will develop when you take the plunge and begin building your fortune by investing in property options.

Property Options Give You What You Want

It can be hard to determine if you are going to get exactly what you want when you invest your money in any market. There is no way to predict your success or failure with each property in which you invest. However, with property options you will have a plan from the very beginning and you will know exactly how you are going to benefit from your investment. This method of investment allows you to think about, look at and plan for the property in which you want to invest your money, prior to the actual purchase of the property.

This provides you with the opportunity to see the full potential of the property as well as decrease your overall investment risk. In the traditional real estate market, if you are going to benefit from investing, you must first purchase the property outright, and then work on increasing its value in order to make any profit at all. The great thing about investing in property options is that this is not the case, at least not in the beginning.

Down The Road

As time progresses, you are more than likely going to make the decision on whether or not to purchase the property. The majority of investors find that they are in a position to make a more informed decision because they have taken time to fully understand the true value of the property.

Property Options Australia
Property Options Blog © 2006 - 2009

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So, you have decided that you are ready to take the plunge and try your hand at real estate. You have probably figured out by know that you have a couple of options.

You could invest your hard-earned money into the traditional real estate market where you will have to purchase the property outright, pay for the upkeep of the property, worry about tenets and all of the other headaches that come with investing in the old fashion real estate market.

Better Property Options

The other option that you have is to invest a smaller amount of your hard-earned money into property options, a new kind of real estate investment that is taking off in leaps and bounds. You save money because the investment that you have to make upfront is smaller because you are not buying the property, you are only buying the rights to profit from the property.

If you go with the traditional real estate investments, you are at the mercy of the market. The economy trouble that they are experiencing over in the United States is reeking havoc and causing problems in real estate market all over the world. Investors are growing more and more concerned as the fate their financial well-being rests on the stability of a troubled market.

Controlled Investing

On the other hand, since you do not actually purchase the property when you invest in property options, you can walk away anytime you feel the market is no longer the place for you. The best part is you can walk away without losing a fortune.

Even better, if you chose to stay in the property options market, you can control how fast your profit grows by increasing the value of the property as you so choose.

If you are still unsure about which methods for investment are right for you, contact Mark Rolton of Massland and he will be able to steer you in the right direction with confidence.

Sean Rasmussen
Property Options Australia
Property Options Blog © 2006 - 2008

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Buying a new home is very exciting but there is a lot of work that needs to be done to ensure that everything is done right. Many Australians are taking advantage of the First Home Owners Grant, and that is a good thing. But there are a few things about mortgages that all Australians should be made aware of to ensure that their home buying experience goes as smoothly as possible.

Bad Credit Does Hurt

Every time you are late on a payment or miss a payment altogether it is recorded in your credit history. If you have bad credit it really can hurt you when you go to get a mortgage to buy a new home. It may mean that you are not able to get a loan, or that you have to pay higher percentages on the loan. Have a look at your credit history before you go in to get a mortgage. It is best if you know what is on there and avoid any unexpected, and unwanted surprises. It is also a good idea to check your credit history to ensure that it is accurate. Sometimes things get put on to hurt your credit score that are not your fault, or is entirely untrue. A good rule of thumb is to check your credit at least once a year, or every six months.

Assets Are Not Income

When it comes to getting a mortgage loan, the lending companies are only concerned with if you can repay the money back. They don’t care if you have a valuable collection of rare coins worth thousands of dollars. Unless you plan on selling those coins to repay your mortgage it is of no value at all to them. How much money you make, and not how much stuff you have accumulated that is worth money, will determine how much money you can borrow to buy a new home.

In the next installment we will continue to look at different mortgage issues.

Sean Rasmussen
Property Options Australia
Property Options Blog © 2006 - 2008

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Buying a new home can be pretty overwhelming. Many new home buyers have a particularly hard time when it comes to navigating through the process of acquiring financing for their new home. For many Australians the whole process can seem overwhelming and challenging to say the least. There are some steps that you can take to making the process of securing a mortgage for your new home a lot easier though.

Determine How Much You Can Afford

The most important thing to do when looking for a new home is to decide how much money you can afford to spend. And then stick with it. Do not borrow more money than you can afford to pay back. Even if you are expecting to get a better paying job in the next few years, or are anticipating a raise coming up, do not get in over your head in debt. You never know what will happen in the future and that raise that you are expecting could end up going to someone else. The better job that you were sure that you would land just might fall through. There are many things that can happen that will affect how much money you can afford for your repayment fees. So determine how much money you can afford based on what you are making right now.

Determine How Much Money You Will Need For A Deposit

Once you know how much money you can afford for your new home you will need to set aside some money for your down payment, or deposit. Many financial institutions require that you put down 10-20% of the purchase price of the home, or the value of the property. It is possible to get a 100% mortgage, which means that you do not put any money down, however it is always best if you can put some money down on the property. This also builds your credibility with lenders and shows that you are serious about and dedicated to your new home purchase.

Sean Rasmussen
Property Options Australia
Property Options Blog © 2006 - 2008

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