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How much is your property investment really worth?

Wednesday, 15th Sep 2010
Categories: Finance, Newsletter

Often the last and most difficult hurdle for final approval of a loan is to obtain a favourable valuation on the property however a valuer cannot, and should not, be expected to value a property at a price higher than it is actually worth.

All properties are unique, so putting an exact valuation on a property is difficult. A property valuation can vary by tens of thousands of dollars, depending on the judgment of the valuer, and a favourable valuation is the maximum reasonable value within this range. The higher the valuation, the more lenders will be willing to lend to us if you decide to use the property as security.

While most lenders will only consider the lesser of either the purchase price or valuation when calculating borrowing capacity, the subsequent valuation offer after twelve month is very important.

As an investor, we want to convince the valuer that our property should be valued at the upper end of the price range. Along with your property’s physical presentation, to maximise the valuation on your property it is important that you provide sales evidence of recent comparable sales to the valuer, so they can understand what is happening in the market in your area.