When determining the value of your property, choosing the right service is of the utmost importance. For the most reliable and precise figures, an independent property valuation is your best bet.
Valuations don’t last forever though, and how long a property valuation is good for may not always be obvious.
There are various property valuation firms in Sydney that can be of assistance to individuals, professionals, and organisations in need. The reports are prepared by professionals registered with the Australian Property Institute (API).
Known as valuers, these experts are carefully trained in preparing comprehensive and objective valuation reports. By considering hundreds of internal and external factors, valuers can prepare reports in accordance with a client’s needs and the relevant regulatory requirements.
Valuation reports are accepted in the eyes of the law and serve as conclusive proof of a property’s worth. As such, they can be used in all sorts of private and legal negotiations and transactions.
A valuation report can be used for residential, commercial, industrial, and rural properties. It doesn’t matter what type of property you own, a valuation report can be of significant value.
At some point, however, the report will no longer be valid as the conditions under which the assessment was performed will have changed. Anyone who owns or is interested in owning real estate should ensure that they have an up-to-date valuation of the property.
How long is a property valuation good for?
A valuation report is typically seen as valid for 6 months to a year after the inspection depending on the nature and purpose of the report. While reports do not usually include an expiration date, the nature of the market means a relevantly recent valuation is needed.
It should be noted that if there are significant changes to the property or the market post-valuation, a new valuation will be needed to suit the existing conditions. Certain properties may require more frequent valuations than others.
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A valuation is only seen as valid if prepared by a registered and independent professional who holds the necessary qualifications. Services such as real estate appraisals and online valuation tools do not have the attached validity and will not serve to benefit individuals and organisations in the same way.
The process behind property valuations
A property valuation usually involves a detailed inspection that takes into account several different considerations impacting the value of the property. Valuers look at factors including the size, location, parking, condition of the building, market conditions, and more when preparing the report.
Valuers use a combination of reliable methodologies and calculations. First, a primary method is chosen as the main focus, then secondary methods are used to refine the final figures.
While several approaches exist, there are three that are most commonly applied. These are:
The direct comparison approach
A popular method for valuers that is mostly used in the assessment of residential properties. Experts consider the sales of comparable properties within the last six months to reach a foundational value.
Valuers will then make the necessary adjustments in accordance with key differences between the property. Notable features such as the number of bathrooms, the available space, and the condition of the building will all impact the final amount.
The income capitalisation approach
This approach is often used to analyse commercial properties that produce an income. Valuers will need to consider how much money the property is bringing in when determining its value.
First, the net operating income is determined. This is the most recent yearly income minus expenses. The amount is then divided by the capitalisation rate to reach a final monetary worth. Valuers are careful to consider both the condition of the property and its operating efficiency for the reports.
The Summation Approach
Also known as the cost approach, this method focuses on assessing each separate component of the property to reach its final value. Any recent renovations or changes are assessed to make sure the valuation is as up-to-date as possible. The value of the land is determined in addition to the value of any improvements made.
By attaching a monetary worth to each part of the property, valuers use the sum total as the final amount. This approach is useful as a secondary approach as it helps refine the final number to be a more accurate representation of the property in its current state.
Summary
The best way to find out how much your property is worth is to get an independent property valuation from one of the several valuation firms in Sydney.
These valuation reports are prepared by Valuers who are registered with the Australian Property Institute (API) and have experience assessing all sorts of properties. A valuation from a registered expert is the most reliable method of finding out a property’s worth.
A valuation report can remain valid for up to a year. In cases where there are significant changes to the market or property after the valuation, a new one will be needed to find its worth in the existing conditions.
A professional valuer uses a range of different methods to prepare accurate valuation reports. By considering every internal and external factor, precise figures are reached.
For more information on how long property valuation reports are valid for, feel free to speak to one of our highly qualified experts today.