3 Steps to Determine the Fair Market Value of Foreign Real Estate

20230526052122_647041d211733.webp

You don’t want to pay excess on a property. So, it’s important to know what a home really costs on the equity scale

Real estate whether home or abroad is a substantial, long-term investment. It is therefore imperative that you research various countries and neighborhoods before choosing one to invest in because economists agree that there is an opportunity cost to investing in a particular property.

Your research should include the existence of changing political and economic scenarios, as these would have profound impact on the housing market, especially influencing central bank rates and lending policies.

Factors Affecting Market Value of Foreign Real Estate

Location is critical. Apart from the real estate conditions existent in the country, you don't want a place with high crime rate and bad transport system. But looking ahead, you have to examine the profitability of your investment. Home appraisers looking at homes consider features like property age, lot size, internal square footage, number of bedrooms and bathrooms, amenities and overall condition. Hence the first step in determining your home's market value is taking an appraiser’s glasses and looking at the home objectively, writing down the principal features of your home.

How to Determine Market Value of Foreign Real Estate

Valuing a home is not an exact science but here are some things you can do to make a ‘scientific’ guess on the fair market value of a property abroad.

1. Check out comps.

Find four or five comparable homes in the area that have sold within the past six months. A local agent should be able to help you with that data. Your research on comparable homes (comps) will give you a good indication of what your intended property might be worth. Comparable homes should be roughly the same size, construction, age and style with the same number of rooms, layout and other features. You want to identify the prices at which these properties sold and how fast they left the market.

2. Calculate the rate per square foot.

For each of your comps, divide the selling price by the square footage of the property. This gives you a price per square foot or PPSF. Find the average value of these homes by adding the PPSF figures and dividing by the number of comps you are using. For example, suppose it has the following compositions:

Property A is 2,000 square feet and sells for $ 420,000. The PPSF is $ 210.

Property B is 2,200 square feet and sells for $ 480,000. The PPSF is $ 218.

Property C is 1,900 square feet and sells for $ 390,000. The PPSF is $ 205.

Property D is 2,000 square feet and sells for $ 475,000. The PPSF is $ 237.

The average price per square foot is $ 217. Multiply this figure by the number of square feet of your home to get a rough idea of ??the market value of your home.

3. Consider the special qualities of your home.

While the PPSF gives a benchmark, it does not take into account the unique features that could raise or lower the value of your home. Improvements like a new bathroom, kitchen or siding tend to add value; On the contrary, it is likely that a home in poor condition will have a lower value than a well-maintained property. There is usually a wide variety of prices per square foot based on these factors. Ultimately, you have to decide if your home is worth more or less than the average PPSF in your neighborhood.

 

 

Previous Post

Buying Foreign Property 5 Effective Ways to Make Your Offer Stand Out

Next Post

Top 7 Benefits of Buying Property Abroad

Related Posts

20230526051321_64703ff1b5737.webp

5 Easy Home Design Ideas to Make Over a Room

  • 02, September 2023

What goes on in your head when moving into a new home? Foremost, how do I turn this empty shell of a house into an inviting home that reflects my own personal style? You don't want a bland and boring house. Your new house offers a new start. You can eliminate the junk and put in new digs; you can buy that bed you've always dreamed about; or beef up the kitchen and dining area for maximum comfort and entertainment. The great thing about home decoration is that you have the chance to improve your home's appearance without spending much money. Let's look at some home design ideas for giving each room in your house a makeover.

 

When giving a home a facelift, sometimes simple solutions can have a big impact. Here are some inexpensive home design ideas to give rooms a new lease of life.

 

1. Don't rush. You need to take a little time before starting major decor projects in your new home. Take some time to let in the feel and observe what the home needs before buying major stuff. HGTV recommends staying in the house for two months before making significant purchases. You might be spending money on the wrong areas. For example, instead of spending $5,000 on revamping and putting new features in your bathrooms, you might find out that you could spend half the price to get your bathroom in great shape.

 

2. Add color to walls. For people who get out early, a light shade will do while a deep tone will make the house more homely for those who spend more time indoors. You can also make a statement with a feature wall. Adding a lick of paint to your walls is an inexpensive way to give your room an instant lift. Whether you decorate your entire room in an intense shade or opt for a stylish two-toned plan, fresh color on your walls guarantee oodles of glamor.

 

3. Pare down. Now it's time to reassess and evaluate what works and what doesn't. Don't pack everything from your old home over. You don't really need everything you've accumulated. They will only make rooms stuffy. Having a new house gives you chance to try out a fresh approach. This means you can pare down on tired pieces that will only clutter up your space. You can sell these items off on eBay or drop them off at a charity shop.

 

4. Use right lighting. Transform the mood of rooms at a cheap price with the right lighting. You can also invest in dimmers to switch from bright to low lighting. When decorating bathrooms, try out stylish lights. For bedrooms, buy a fresh shade for lamps. You can give your room a cohesive style with stylish lighting.

 

5. Update roller blinds. Whether you go for a subtle floral pattern or statement stripes, roller blinds for your windows are great low-cost, high impact options for designing rooms. They can transform your dull windows and complement other designs in your room.

Less is often more when decorating and less is also eco-friendly. No matter how small your space, you can always let your creativity shine through.

 

By Bebuzee Admin Read More
20230526053215_6470445f0b88c.webp

5 Fears Limiting You from Real Estate Investing

  • 11, May 2023

Just like any investment where speculations are involved, there is risk with real estate investing. Investors who have gotten their fingers bit have fed us the ‘negative stories’ and have helped create many fears. Yes, there are risks, and they can make for a pretty bad fall if you don’t prepare for them. But there are also fears. Here we’ll explore five basic fears stopping you from making that real estate investing decision.

I also hope to expound on these fears to help you see that you can get past them. The best way to overcome fear is embrace it and do that which you fear. So, no matter what we say, the decision to take the plunge still lies in your hands. Will you create long-term prosperity with your real estate investment or let fear hold you back?

1.     Negative Cash Flow.

Cash flow is what remains when the operating expenses, the mortgage costs and other expenses have been deducted. The fear of negative cash flow, mostly fed by investors who have been there and done that, has held many people back. However, it is just about making the right calculations. You don’t expect to be 100% accurate about the possibility of vacancies or how much rental income you could make in a month but you can obtain past rental figures from the previous landlord, estimate possible repair expenses and still get your numbers close a notch.

 

2.     Right Timing.

You’ve always heard ‘you’ve got to time the market’. The problem with that is this: you might never find the right time. If you’re afraid that the market might just not be ripe for real estate investing, I say that’s FEAR. As long as you can comfortably buy a property without putting any strain on your family’s budget and the country in which you’re investing isn’t in a pothole, go right on. The time is right.

 

3.     Chasing the positive cash flows.

Some real estate agents who have tried and fumbled will tell you that you can’t cash flow positively on duplexes, condos, office complexes etc. With discouraging tales of despair, you catch the FEAR. This is actually an opportunity to learn from their mistakes. They failed because they went in with the wrong PLANS. Learn, attend seminars, buy DVDs and EBooks and develop a fail-proof strategy and you’ll get the positive cash flows.

 

4.     The hassles of management.

Chasing renters for each month’s rent and dolling out money on property repairs are all reasons to run far from real estate investing. What if you had a troublesome tenant giving you problems? The hassles could keep you awake at night. You however do not need to go through the stress of managing your property yourself. You can hire professional property managers or management companies to do the job and do it well.

 

5.     Lack of experience.

Yes, you do lack experience. All the seminars and courses do not make up for firsthand experience. So, if you lack the experience, why not work with a realtor who is a local expert and leverage their experience. (Check out the importance of a local realtor).

 

In conclusion, it’s not certain that investing in real estate will make you an overnight millionaire but if you do your homework and work with the right people, you’ll do just fine.

By Bebuzee Admin Read More
20230526051803_6470410bbe8bc.webp

Take Heed of These 5 Things When Buying Property in France as a Foreigner

  • 21, August 2023

With delightful sights and enticing cuisine, it's no wonder France is at the top of the list for many tourists. And not only tourists, people who are banking on profiting from these fascinations are snapping up properties fast too. France also boasts collections from masters of both modern and contemporary art.

However, if you're looking to buy a home in France as a foreign investor, don't be distracted by the sights. It's easy to be carried away by the beaches of Riveira, wandering through the battlefields of Normandy or viewing castles along the French countryside. You will need to focus your efforts on getting the deal done right. Let’s consider some stats on French property prices.

Facts about property prices in France

Prices are competitive and mortgage rates are currently low in France, according to Notaires de France. In the past year, over 900,000 properties have changed hands. Even though a surprisingly large number of these properties (90%) were bought by people looking to live in, rather than let. For investors, this means there hasn't been a property bubble and this might just be the right time to buy a house in France. Price is increasing steadily. Notaires de France estimated a year on year increase of 1.2% in property prices by August of this year and a jump of 4% in property prices by the end of the year.

What to know when buying property in France

Although the process of buying property in France is fairly straightforward, here are some things you need to know:

1. You're not required to hire a solicitor. As a general rule, buying property in France must proceed without an advocator or solicitor. It can't be delegated. So you have to travel and spend time and effort on acquiring the property.  Although property buying and land registration in France are secure, you need to have your wits about you.

2. You should learn French. If buying a house in France, you should know French or at least hire a translator. Trying to infer what the other person is saying will only give you a false sense of security. On the other hand, a knowledge of the language will bolster your confidence.

3. The notaire will not verify everything. The notaire may not be able to tell you if the property would give good ROI or what liens are currently on the property. There is room for you to do your own research about the property and about prices in that neighborhood. It's also advisable to get a specialist property lawyer.

4. Estate agents mostly act for the seller. Take care to read through any written offer. Make sure that the content of the offer are subject to a written sales and purchase offer. Also make sure you read through the content of the sales and purchase offer prepared by the agent to ensure equity. As with buying property anywhere, take your time before signing on the dotted line.

5. Local mortgages can be favorable. You might want to consider buying with a French mortgage as mortgages in France are relatively cheap. If you'll be seeking a mortgage, it's important you throw in a conditional clause in the sale contract.

In conclusion, having your own notaire is advisable. Don't expect the notaire working for both seller and buyer to seek your best interest.

 

By Bebuzee Admin Read More