Submitted by: Trapp Justin

If you are trying to make the best property development deals available it is important that you learn how to evaluate the value of a property with a fair amount of accuracy. You need to be able to do this yourself as well as listening to what the real estate agents you are dealing with are telling you. They may be able to tell you what the comparable properties in the area are selling for but they may not be aware of all of the factors that can influence how much a property is worth. Here are a few things that you may want to conside

Lack of overhead or extraneous costs

You may find that a property is more valuable if there are fewer costs associated with it. A property that is zoned properly for the use you want it for, that does not require extensive renovation or which has fewer licenses or permits required to develop it will be much more valuable than a property that you will need to work hard to bring up to code or to make useable.

Remember that it is not only the money but the time expenditure that can be costly. A property that will take months of work is likely going to be less valuable in many cases than a property that can be made ready in a shorter period of time.

Future plans for a property

Sometimes the most valuable properties are ones that do not need to be developed at all. If you are able to find out where large municipal projects will be constructed you may be able to simply buy a piece of land, sit on it for some time and then resell it for a large profit. This can be a huge asset since you will not need to worry about zoning, construction or permits of any kind.

You need to keep in mind that these investment opportunities may be quite few and far between. Unless you are able to find out about a deal fairly early on in the process you may be dealing with other developers who have the same plans for the piece of land that you do.

How the cost of the property will affect your cash flow

You need to consider how purchasing a particular property may affect your cash flow. There are many cases of individuals who were house proud and cash poor. They had invested too much of their money in a property. This can also happen to some developers. Overstretching your finances on a dream property can be a problem if, like recent events have shown us, the market changes drastically and houses and other real estate become much less valuable.

There are many other factors that can affect the value of a property. Some may elevate the value over the asking price, in which case it would be extremely worthwhile to make a purchase. Some may mean that you will have trouble unloading the property and may take a financial loss from its purchase. Learning to tell which factors are affecting a property that you are looking at is a valuable skill indeed.

About the Author: Justin Trapp is a Licenced Property Broker who writes about topics concerning Property Investment and development in the USA, To find out more about him visit his website

us-properties-direct.com

Source:

isnare.com

Permanent Link:

isnare.com/?aid=884893&ca=Real+Estate