Local Market Actually Does Equal Location

Posted on November 6, 2013 by

As a regular writer for the Atlanta REIA and Tampa REIA, I look forward to sharing with readers current, timely concepts and ideas regarding the valuation of real estate in many markets. Perhaps even better than sharing in these articles, is knowing REIAComps helps to quickly see how the location of your market impacts the profit of a deal year to year and in some cases, month to month.

Each month, I will share facts on local real estate statistics, market trends and provide useful tips for buyers and sellers. Additionally, I sometimes will discuss the lending process, real estate appraisals and other topics residential real estate investors can benefit from.

Now, in most cases nearly all investors are familiar with the “age old rule” concerning real estate: “Location, location, location.” Many times, the high importance of location is overlooked when examining broader national or even regional real estate trends.

In your own market, property values and selling trends will frequently differ vastly between counties, subdivisions, school districts and neighborhoods. Often there is a huge difference in home values between streets within even assumed stable neighborhoods. To prove out this point, consider the three-mile radius around your very own home. Note the variables impacting its value either positively or negatively. Some examples include the home’s proximity to traffic congestion, a school, amenities, places of worship or a busy commercial district.

So when you hear information about real estate prices and market conditions, make sure it’s focused on your market area or region and not another part of the state or country.

The information shared may not be relevant to your market at all and sometimes it is quite the opposite. You may find for your market area, the local real estate market is healthy and growing or sick and shrinking.

Now the real fruit is to using REIAComps to always calculate two numbers. The acquisition value as well as the after repair value (ARV). As investors, we want to have a solid idea of not just the value of a dwelling. Because we are proactive in our business acumen, thinking of the next individual in the transaction, it is vital to demonstrate there is an equity position for the buyer. Use your REIAComps to determine the best acquisition and ARV on every deal you look at. Don’t for one moment let someone tell you the value. Let REIAComps show you for yourself.

Mark JacksonMark Jackson is an appraiser, real estate investor and property valuation specialist who teaches others to get more out of their real estate investing business. In 1999, Mark founded an appraisal company and soon found his true gift was analyzing property values for real estate investors. Since 2000, has closed millions of dollars’ worth of his own domestic and international real estate transactions. Mark’s passions are: faith, family, golf and real estate.

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