A property investment is the biggest step an individual can ever make. However, the challenge comes in when maintaining and enhancing its value. Valuation is an essential task though some owners view it as a gratuitous expense. Asset valuation is vital whether for a new or old. Currently, there is a lot of information going around among real estate agents and over the media. It has made property valuation an overwhelming task. An investor must consider finding the accurate information to get the right value of their asset. There are many benefits of valuing a property. Here are the reasons an investor must value a new property.
Why value a new property?
Ideal for accounting needs
Valuing a new property involves accounting for the cost of land, building and other related expenses. The cost of a building alone excluding land is depreciable and generates a tax deduction. Valuation helps in determining the accurate value of the asset which is critical for liquidity needs.
To determine related expenses and rental prices
Valuing a new asset enables one to know the current market price of a building and rental prices charged on properties of its kind. Valuation is a prerequisite when determining expenses that either increase or reduce a property’s value. An investor, therefore, can assess rental prices and costs.
To determine the right use of the new asset
New property valuation is beneficial when ascertaining the purpose of the asset. An investor would like the highest selling price of their investment. By finding the proper use of property, it can be simple to open attractive rental prices. The owner has to determine whether to use their asset for retail. Industrial or commercial purpose.
To unlock opportunities for additional funding
After the completion of establishing a building, the owner may need funds for development or to maintain their asset. For most banks to approve loan requests, they need a security preferably an existing asset. By knowing the value of the property, one can quickly acquire a loan.
There are many ways that one can utilize to increase the value of their investment. Some of the popular, inexpensive ways of increasing asset value are landscaping, doing basic cleaning, doing a lighting refurbishment, modernizing the interiors, adopting green lifestyle and painting among others. An up-to-date asset valuation is vital for an investor, and the above are some of the reasons to value a new property.