Belt Auction

As a real estate investor, what resource do you use to determine the value of a property?

I recently found zillow.com that offer zestimates of property and I also have access to the county assessor's office to view the value of the property. What do you recommend?

Public Comments

1. Although Zillow shows what prices properties were purchased for, it doesn't take into account improvements that have been done to the property, so their "value" between the last time it was sold and the present is a guesstimate at best. The assessor's value is for tax purposes - it is not the home's market value. Use a qualified appraiser.
2. Assessor's valuation is meaningless. The value to you as an investor is based on the potential income and costs. You need to know how much rent you can reasonably collect. You should know about the rental market in that area (will it be unoccupied long?). You need to have a private assessment of the lifetime remaining on systems (air conditioning, roof, foundation, paving, etc.) and their replacement or repair costs so you can estimate the present value of future expenses. You need to examine the re-sale potential. An appraiser, particularly one familiar with condo or apartment reserve appraisals, can give you the information you need. Any off-the-cuff estimate (zillow) is based only on the recent selling price of similar properties in the area, not your particular property or its potential.
3. I would subscribe to propertyshark.com and realtrytrac.com these sites are very helpful. In addition, ask a Realtor they have access to websites that will give them recent houses sold and the market value
4. You imply investment property in your question, not residential. So, I'll give you an investors answer. Ignoring condition, location, financing etc., an investor simply looks at two things: What is the income that the property can produce, how much to manage, operate and pay taxes on. This will be called net operating income. NOI is capitalized by a combination of the market and the desired return that the investor wants. By dividing the NOI by the capitalization rate, a purchase price is arrived at. Now the second thing is the cash-on-cash return to the investor. If there is no loan, then the COC return is exactly the same as the capitalization rate. If there is financing, the COC return would be the income minus the debt service.
5. The best place to figure out a value of a property is to become a member of your local board of Realtors to gain access to the multiple listing service. You can likely become an "associate member" and not necessitate a real estate license, but then again getting one would only add to your expertise. Or you could simply rely on an experienced Realtor to help you "bird dog" properties that offer profit potential. I do this very thing for a handful of active investors. I get commissioned on the purchase of every one since the seller pays the commission, but only get paid to sell about half of them as some sell them themselves or simply hold on to them to rent out.
6. If you are just looking for a value of a property get a realtor, its free. A realtor can get you an up-to date market evaluation based on recent sold like properties in the area. This is the information you need to make an informed decision. The market determines the value of the property not the tax assessor .You won't get a real comparison on the internet. The value of the property is only one factor I look for in purchasing a revenue property. I have a dozen other criteria to look at prior to purchasing a property. I don't care how the property is running today or in the past I only what to know how it is going to operate in the future for the time I own it.