Unlocking Value: A Guide to Finding Comps for Appraising Investment Real Estate
Determining the potential appraised value of an investment property is a crucial step in real estate investing. Comparable sales, commonly referred to as "comps," play a significant role in assessing a property's value. By analyzing recently sold properties with similar characteristics, investors can gain valuable insights into the potential market value of their investment. In this article, we explore effective methods to find comps in your area to determine the potential appraised value in investment real estate.
Utilize Online Real Estate Platforms: Online real estate platforms have revolutionized the way investors access property data and comparable sales information. Websites like Zillow, Redfin, and Realtor.com provide comprehensive databases that allow users to search for recently sold properties in specific areas. Utilize search filters to narrow down results based on property type, size, location, and sale date to find comps relevant to your investment property.
Work with a Real Estate Agent: Engaging a local real estate agent with expertise in the area can be invaluable when finding comps. Agents have access to Multiple Listing Service (MLS) data, which provides detailed information on recently sold properties, including sale price, property features, and photos. They can create a comparative market analysis (CMA) tailored to your investment property, highlighting relevant comps and providing insights into the local market trends.
Network with Real Estate Professionals: Networking with real estate professionals, such as appraisers, brokers, and fellow investors, can provide access to valuable market information and help identify comps. Attend local real estate networking events, join industry associations, and connect with professionals through online platforms like LinkedIn. Engage in conversations about recent sales and market trends to gain insights into comparable properties in your area.
Explore Public Records and Tax Assessments: Public records and tax assessments are valuable resources for finding comps. Local government websites and county recorder's offices often provide access to property records, including sale prices, property characteristics, and transaction dates. Additionally, tax assessment websites may offer assessed values for properties, although it's important to note that assessed values may not always align with market values.
Drive Through the Neighborhood: Taking a drive through the neighborhood where your investment property is located can offer firsthand observations and help identify potential comps. Look for recently sold properties with similar features, such as size, style, and condition. Take note of "For Sale" signs, as these properties may provide valuable comps if they sell before you complete your appraisal.
Consider Online Real Estate Data Services: Several online real estate data services provide comprehensive property information, including recent sales data and comps. Services like CoreLogic, ATTOM Data Solutions, and PropertyShark offer subscription-based access to a wealth of property data, allowing investors to conduct in-depth analyses and identify relevant comps for their investment property.
Engage Appraisers and Valuation Experts: Appraisers and valuation experts have the expertise to determine the appraised value of a property based on comparable sales. While it may incur a cost, hiring an appraiser to conduct a formal appraisal can provide a comprehensive and professional analysis of the property's value. Appraisers utilize extensive databases and methodologies to identify relevant comps and make accurate assessments.
Determining the current and future value of any real estate purchase as well as periodically assessing your current portfolio allows you to make sound investment decisions. If this is not currently part of your analysis strategy, make sure it becomes part of your strategy soon! While you can run comps by yourself, your agent should be doing this for you or alongside you as they have the expertise in this area. If you are in need of an experienced real estate agent, reach out to a member of my team at steelcityrealestate.com.