ASK454: How do I establish a property's value? PLUS: Should I rent as social housing?
Nov 12, 2024
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Learn how to effectively assess property values using comparison techniques and real estate insights. Discover the best practices for due diligence and the role of surveyors in unique cases. Also, explore the pros and cons of renting to social housing, including guaranteed income and property maintenance. The hosts provide invaluable advice to help listeners navigate these important investment decisions.
09:27
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Quick takeaways
Conducting thorough due diligence by comparing similar properties and seeking insights from estate agents is crucial for accurate property valuation.
Renting to social housing can provide guaranteed long-term income and management benefits, but landlords must vet providers to ensure property maintenance quality.
Deep dives
Enhancing Property Valuation Accuracy
Accurately valuing properties during due diligence can be challenging, especially in fluctuating markets. Using tools like Rightmove and Super, it's advised to search for comparable properties within a narrow radius to assess value effectively. This involves comparing properties of similar size and condition, ensuring that the assessment is based on reliable data rather than broad estimates. For finer insights, reaching out to estate agents for justification on property pricing can clarify underlining market conditions and help avoid overpriced listings.
Pros and Cons of Renting to Social Housing
Renting to social housing offers the advantage of securing a guaranteed income over a long-term lease, even if it results in slightly lower monthly rental income. Benefits include built-in property management and maintenance, alleviating the landlords’ burden. However, potential drawbacks arise as property conditions may not be maintained at the same level as traditional rentals, and the actual upkeep can vary significantly depending on the renting entity's management quality. It's crucial for landlords to research the reputation of the social housing provider and ensure all agreements comply with lender requirements before entering into a long-term rental arrangement.
Navigating Unique Property Valuations
Valuing unique properties, such as a five-bedroom detached home in a predominantly terraced area, presents additional challenges. These standout properties may not align with typical market comparisons, complicating the evaluation process. Such unique cases are less common in buy-to-let scenarios and typically require more in-depth research or even professional appraisals to determine accurate market value. While hiring a surveyor might be an option for thorough assessments, many investors find that sufficient data can be gathered through extensive market research and comparable listings.
Join us for this week’s Ask Rob & Rob as they answer two more listener questions…
(0:41) Shenton’s looking for the best way to conduct thorough due diligence to get a precise property valuation. With tools like Zoopla often giving broad estimates and limited data on comparable deals, he turns to Rob & Rob for their top tips.
(5:15) Chris has been offered the chance to rent his buy-to-let property through social housing, with a five-year guaranteed yield, annual rent increases, and full property maintenance. He’s wondering if this is a smart move or if it’s too good to be true – what will the guys say?
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