What should I be paying for my USA Investment Property and how can I be sure I am paying the right price ?

What should I be paying for my USA Investment Property and how can I be sure I am paying the right price ?
Investing in a buy-to-let property can be hugely rewarding and a sound financial decision. But only if you’re getting the right price and know all the facts.
Nobody likes to be overcharged. This is especially true when it comes to big purchases, like a property investment. No matter the current state of the property market, you want to make sure you are paying the right price for your investment property. 

But the questions is: how do you know what is a good price and whether the likely return on investment is what it is advertised to be ? To help you navigate the tricky world of buy-to-let investments, read this quick guide.

What is fair market value?

To put it simply, fair market value is the price that a property is expected to sell for on the open market.
The term is used frequently in real estate, and has come to reflect the price of a home under the following conditions:
  • Buyers and Sellers are knowledgeable about the property.
  • Buyers and Sellers are free of undue pressure to trade.
  • Buyers and Sellers are given reasonable time to complete the transaction.

And, most importantly:

  • The price of the property reflects the standard and condition of the home.

At Global Investments we always take the time to establish the true value of a property and the likely returns based on its location, state of repair and current market conditions – all of which is supported by the local agents we work with who have a detailed knowledge of the neighbourhoods. Also we negotiate strong with our Suppliers to try and ensure that our Buyers are actually paying below market value for the majority of our houses. 

You can always check these prices offered by any agent by performing your own research so that you can evaluate the price of a property and ensure that the investment you are making is a sound one.

Look at recently sold properties

Seek out properties that have been recently sold and which you can easily compare to your prospective investment. Ideally, this is a property that is similar in size, neighbourhood, condition and amenities. Two 1400-sqaure-foot homes in the same neighbourhood should be listed at similar prices.

You can also look at homes that have distinct differences from the buy-to-let you are interested in. Is the property that has caught your attention cheaper than larger properties? Is it more expensive than smaller or less attractive houses? How does it fit with the recent market?

Explore comparable properties on the market

Don’t just look at properties that have already sold, however. Take the time to visit other homes for sale and get a real sense of how their condition measures up to those of your chosen property. This will help to provide a clearer idea of whether the price you’ve been told is fair. 

Look at unsold properties

Some homes are taken off the market because they didn’t sell. If the price of your chosen home is similar to those of these unsold homes, the property in question may be priced too high.

Also, if there are many similar properties on the market, prices should be lower, especially if those properties are currently vacant.

Consider market conditions and market appreciation

Look at the state of the wider property market. Have prices been going up or down recently? The fairness of a property’s price depends largely on where the market currently sits on the real estate curve. Some research is often required to get an accurate picture of the current market, as it can be difficult to see the overall patterns until they’ve been and gone.

Where your home is situated and the future prospects for the local area can have an impact on property pricing. If a town or neighbourhood is set to receive substantial investment with new construction work, new employers and new amenities in the pipeline, there’s a good chance that property prices could be on the increase. 

Similarly, improving transport links, reputable schools and low crime rates can all give you confidence that your investment will see its value go up rather than down.

On the other hand, if local businesses are closing down and the area is slowing, values are more likely to stagnate.

Get an expert opinion

Thanks to experience, trusted estate agents and investment experts can guide you as to the future prospects of a property. They’ll also be able to get a firmer grip on recent data and prices, so don’t be afraid to ask for help and advice when you need it.

The Bottom Line

The right investment experts will offer you a fair price for your property investment. Researching around both the company itself and the wider market can help you gain a clearer idea of whether the price you’re paying is in line with the property’s actual value. 

At Global Investments we always work hard to ensure that the investment opportunities we present to clients represent the best value for money and the highest net returns possible. Get in touch with our friendly, knowledgeable team today and we’ll be happy to offer our advice on the best opportunities in the market today invest@globalinvestmentsincorporated.com

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