Wondering what your investment property is worth on the Sunshine Coast in 2024? There are a few ways you can get an idea.
Licensed Property Valuer
First, you can pay around $600 to have a valuation done by a licensed valuer. These valuations are very comprehensive usually including a few comparable properties as examples, that sold within the last few months. A common valuer on the Sunshine Coast is Herron Todd White.
Sales Appraisal
A licensed real estate agent can do a sales appraisal for you. While these are usually free they can come with some catches.
- It’s possible by contacting a sales agent they may then pester you often, be pushy and even apply pressure for you to sell.
- Sales agents can sometimes be overconfident with what they expect a property would sell for to only tell the property investor later when the property does sell at that level they need to sell for less.
- Some sales agents don’t bother, doing any research and just guessing.
- Some sales agents can have an ulterior motive. Which is to get you to sell your investment property and sometimes they can overestimate the sale price to make you want to sell.
In-person or Remote Sales Appraisal
When you have a sales appraisal done on your investment property you have two main options. In person where the sales agent attends the investment property or it can be done remotely. If the property has a tenant in place it is sensible to start with a remote sales appraisal to not concern the tenant or the property manager.
Remote Sales Appraisal
With investment properties where tenants are in lease a good place to start is with a remote sales appraisal. This ensures your tenant and property manager aren’t freaked out about a possible sale that might not even happen or might be some time away.
Where remote appraisals can confuse people is they assume a real estate agent needs to see the property in person. That’s not true. With online information and access to software like RP data, real estate agents have access to considerable information.
One of the main reasons sales agents would want to see the property in person has nothing to do with working out a possible sales price but for them to become more involved with the owner to make a connection, build a relationship and sell the property to make money. Unfortunately, they have their interests in mind and not the interests of the property investor.
Of course, what a remote sales appraisal won’t show is the condition of the property & how it presents with the tenant in place. Once I have done a remote sales appraisal if the potential sale price is something the property investor is happy with the next step is for me to then attend the property to check its condition and presentation.
If a property investor is keen not to disclose to the tenant or property manager just yet about a potential sale, I can still get an indication of the property’s condition and presentation if the property investor can send me the most recent routine inspection report with the photos. Routine inspections should be done about every 3 months and if the property manager is doing their job the routine inspection will include a lot of photos, some notes and any concerns.
What will you get with my sales appraisal?
I do these in RP data. I can spend up to 2 hours on them. It’s a service I offer for free. I first look at what comparable properties have sold in the last 6 months. I then drill down into each sold property to note how they compare and differ. I often make notes against each of these properties. If over the last 6 months, not many properties have sold I then go back 12 months. But in doing so I also look at the market peaks and troughs. Did a property 12 months ago sell at the peak and has the market cooled since then and by how much? I look at the age of the properties, land size, renovations or updates. Size of the homes. Quality of fixtures and fittings too. If two comparable properties sold for fairly different prices I try and understand why.
The RP data report you get from me is a several-page PDF with photos and my notes.
I try to be conservative. For a recent property I sold, I told the owner it should sell for around $600,000, they had hoped to achieve $625,000 and I sold it for $655,000. Another I told the owner around $800,000. Then just before going to market I did an updated appraisal and suggested now around $850,000 may be possible and it sold for $860,000.
No real estate agent knows exactly what a property will sell for. While I try to be conservative, many real estate agents are the opposite and over-inflate their sales appraisals in the hope of winning the listing to sell.
So with this all in mind property investors should take all sales appraisals as just a general guide.
What do I need from a property investor do to a remote sales appraisal?
- The address of the investment property
- If you’ve made any improvements since buying the property
- Your phone and email
- Current weekly rent
- Lease end date
That’s a good start. If you have a feeling about how much you hope it would sell for that would be helpful too. I am going to come up with my figure regardless of what an investor’s expectations are. If I feel a property will sell for $900,0000 and the property investor is hoping for it to sell for $1,200,000 maybe I have missed something.
It’s common for people to feel they need to keep their hopes of a sale price close to their chest & disclosing this to some real estate agent could be problematic. But with myself I will be telling you anyway what the research has shown and by you letting me know your hopes it allows us to have a robust, common sense discussion around pricing. It’s a bit like going to a doctor and not telling them why you are unwell and making them guess instead.
In-person sales appraisal
If you have an investment property on the Susnhgein Cost with a tenant in place. My advice is to first do a remote sales appraisal. Then if it looks like you will certainly sell then have an in-person sales appraisal done.
A remote sales appraisal won’t impact the property manager or tenant and often property investors get a remote sales appraisal and decide not to sell.
If you are selling your home ( principal place of residence ) the most common sales appraisal is in person where the sales agent attends the home, looks around, makes notes and then does some research on the possible sale price, and returns with their findings.
When I am asked to attend an in-home sales appraisal, I do a lot of research prior and come to the home with comparable sales and an idea of what I think the property would sell for based on my research. Sometimes I look through the property and it’s just how I imagined it would be. Other times but not often, it’s not what I was expecting and all my research is wrong so I need to then do new research and return with what I’ve found to discuss with the owners.
Often when a sales agent attends in person they are keen to secure your business as the chosen agent more than discussing the possible sales prices.
Many agents try to avoid discussing the price or over-inflating the possible sales price. In the industry, we even gave a name for it called “buying the listing” It is very common.
It’s also very common for homeowners to not want to disclose to the sales agents what they hope they could sell their home for. Which makes me laugh a bit but it’s also fair enough. Some agents use his information. If an owner suggests they hope to sell for $2 million many sales agents will just agree that the price sounds about right and hope it works out.
This is my recommendation. Homeowners should be transparent with what they hope their property will sell for. Then ask the sales agent to show them examples of comparable sales that might prove this to be correct. If a sales agent has agreed with an owner’s $2 million expectation they would now need to be able to back it up with some hard evidence.
Why do some sales agents don’t like disclosing a sales price?
In the industry, we have a theory that we lose business on price. It’s true. Just one example, of many I have, is where an owner I know asked me to just be honest with what I believed the property would sell for. Evidence showed around $1,400,000. They wanted a lot more. They listed with another agent for $1,800,000. Selling much later for $1,400,000. I lost a lot of business because of this.
You might hear some real estate agents say things like “ If that money is out there I’m the agent to get it for you”, “We don’t decide the price, the market does” OR “Yes you mentioned you’d hope to achieve $1,800,000 and I feel with the right marketing that’s possible too”
So while I lose business on price all the time. I will always tell my truth which is what the comparable sales tell me.
How to not undersell your property
Above I’ve mentioned how I’ve told owners what their property might sell for then sold it for more. So how’s that possible?
Years ago when the market was fairly stagnant the main strategy was to just put a price on a property and sell it. Then I listed a property for $495,000 and in one day sold it for the asking price. While the owners were super happy and excited, I felt sick. The market had changed and I hadn’t seen it.
It’s now fairly rare for me to launch a property onto the market with a fixed price. I now initially use other strategies, to ensure we are not marketing the property with a ceiling on it. I won’t go into all the details here. But the strategy is to ensure we achieve the maximum sale price.
Real Estate Price Estimation Sites
These should be illegal. Many websites now do calculations on what they believe a property will sell for. Sites like On the house, realestate.com.au and even RP data all offer this but they are wrong
My current home would sell at the time of writing for around $1.6M. But these sites suggest otherwise.
$1.4 – $1.5 m On the house
$1.4 m RP Data with low confidence
$1.47 m realestate.com.au with high confidence
One of my investment properties in Maroochydore would sell for around $1.1M. realestate.com.au suggests it will sell for $1.22m with medium confidence
Do I only sell investment properties?
I sell residential properties all over the Sunshine Coast. While I specialise in Investment Properties I also sell people’s homes too. So reach out to me. I’d love the opportunity to do a sales appraisal for your Sunshine Coast property.
