Other Ways To Determine House Value...
In light of me looking at a potential rehab house in a not-so-desirable area, besides comps, what else can I do to confirm the value of a single family house?
I ask this because I had a situation where I could have bought the house for 10.5k and put 30k into it and the comps came back from several sources that it was worth conservitivly at 70k.
To me, this sounded like a winner, but it was in the inner-city area where investors tend to shy from that part of town.
So if the comps wont convince them of the value, then I need to find a way to further confirm that comp number or correct it.
Thanx-
There are, in the end, only three methods of determining value,
Comps, also known as the market approach.
Cost, i.e. what would it cost to rebuild the house? This is not terribly helpful for most RE investors but is used by both the appraiser and, more effectively, by insurance companies.
Capitalization. A house is worth some multiple of its annual Net Operating Income. In otherwords, its rental income after all expenses. There are approximiately 1,317 threads on Capitalization, cap rates, and how to figure value this way here on TCI.