Get The Guide: Appraisals For Investment Properties
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Investing in property, specifically in Northeast Florida, can be a fruitful and well-worth it experience for investors. However, as the housing market lacks fluidity and can often be perceived as convoluted and hard to understand, it’s important to begin with a strategic approach. The professionals at Moody Williams Appraisal Group in Jacksonville, Florida can help first-time as well as seasoned investors set the building blocks for a successful property investment project. We’re going to walk through the appraisal process for investment properties in Florida and how to get the most bang for your buck – or a high return on investment (ROI).
Similar to the process involved with industrial property appraisals, investment property appraisals begin with the appraiser doing a walkthrough of the property. Upon which the appraiser will inspect the interior and exterior, take measurements of the square footage, and evaluate the home’s fixtures like appliances and plumbing, as well as the features of the home itself. The entire process takes between 7 – 10 days, after which the appraiser will decide on a tried-and-true appraisal method to move forward.
The three most commonly used appraisal approaches are sales comparison, cost analysis, and income capitalization. The appraiser may use the sales comparison approach and income capitalization approach in the case of appraising an investment property specifically. Determining income capitalization is important to help investors estimate the property’s resale value when it reaches the end of the holding period. This is the net of value appreciation or depreciation, as well as the required rate of return on real estate. To find the value, appraisers can use the gross income multiplier model and discount future net operating income (NOI). The sales comparison approach allows appraisers to compare similar recently rented or sold properties in the area and their unique features over a specific period of time.
Once the appraiser’s investment property evaluation is complete, they will detail and draft a comprehensive report of their findings. Investors and lenders can use the findings to move forward with a clear view of the investment they’ll be making. The entire process from start to finish takes from one week to one month depending on the complexity of the case and the appraiser’s schedule. Entirely worth it to gain clear insight into the future of your investment and to be able to make the best decisions moving forward.
As diverse and beautiful as the investment properties in Northeast Florida are, the property market in general is less liquid and not as transparent as other markets. Thus, it’s important to team up with an expert appraisal team, like the longtime pros at Moody Williams Appraisal Group, to ensure a clear, smooth process with the highest return on investment (ROI) as possible. Looking to get your Northeast Florida investment property appraised? Call us at 904-516-8900 and speak to one of our seasoned appraisal experts today to get started.