Whether you are wondering what your property could achieve in the current rental market or perhaps you are wanting to determine market rent of your investment property for lease renewal purposes, understanding the appraisal process is essential and can provide a lot of insight. Throughout this article we’ll explain what a rent appraisal is and how we appraise Darwin-based rental properties at Thrive Property NT.
What is a rent appraisal and how does it differ from a rent valuation?
A rent appraisal and a valuation are two terms that are often used interchangeably, but they actually refer to different things.
A rent appraisal is an estimate of what a property may achieve if it was advertised for rent and is carried out by a real estate agent. Appraisals can be made either online by looking at photos of the property or in-person, where the real estate agent will visit the property, conduct a visual inspection, and then use recent data of comparable properties in the area that have recently been advertised for rent to arrive at an estimated value.
On the other hand, a property rental valuation is a more comprehensive analysis of a property’s value, taking into account not just the physical characteristics of the property, but also broader market conditions and economic trends. A valuation is typically conducted by a certified practicing valuer and is relied upon by banks. To arrive at the figure, they rely on the data of leased properties, rental yields, and other economic indicators.
What do we look for in a rent appraisal?
When we conduct a rent appraisal, we consider the items noted below. However, we also strictly only compare like properties with like properties. This is inclusive of length of time on the market, number of bedrooms, quality of internal fitout, the number of properties for rent at the time and recent advertising, all within a 2km radius, where possible.
Location: One of the most important factors in determining a property’s value is its location. We look at factors such as proximity to amenities like schools, shops, and public transportation, as well as the overall desirability of the neighborhood.
Size and layout: The size and layout of a property also play a role in its value. We look at factors such as the number of bedrooms and bathrooms, the overall square footage, and the layout of the property to determine how it compares with other similar properties in the area.
Condition and age: The condition and age of a property can also impact its value. We look at factors such as the overall condition of the property, whether any major repairs or renovations are needed, and the age of the property.
Features and amenities: The features and amenities of a property can also affect its value. We look at factors such as whether the property has a pool, a garage, solar electricity or other desirable features that can make it more appealing to renters.
Market trends: Finally, we also consider current market trends. We look at factors such as recent advertised rental prices for similar properties in the area, as well as analysing data to determine what is happening in the current market.
Final Thoughts
An appraisal can provide valuable insights into what you may achieve if your property was advertised for rent.
Getting your rental property appraised by a local agent who knows the area well and has a deep understanding of the local market is going to be your best bet for receiving an accurate assessment of your property’s rental value, which can help you to make informed decisions about managing your real estate assets.
The team at Thrive Property NT would love to help you to get an understanding of your property’s current market value. To connect with your local real estate agent, simply click here.