HOUSTON INVESTMENT PROPERTY APPRAISALS
Real Estate Investment Appraisals in Houston Texas
As a real estate investor you need a reliable and accurate source of valuation services that extend beyond those offered by typical residential appraisal firm. The appraisers at Houston Appraisal Company have the experience and expertise needed to provide such services for Residential or Commercial properties at highly competitive rates.
We understand that these types of valuations are usually not only concerned with Fair Market Value derived through comparable sales, but also valuation based on various other appraisal techniques such as the income approach, gross rent multipliers, capitalization rates and more. In short, investment property appraisals look at a broader picture with regards to value including potential for income generation.
Portfolio Evaluation
Aside from purchasing property investors often use appraisals to determine the amount of appreciation their real property investments have accrued. This provides an updated view of your portfolio.
Rent Analysis
Another common use for an appraisal is to ensure that your current rents are inline with market rent. When property values go up or down, rents will usually follow, but unique features of properties must be taken into account.
Property Tax Appeal
One of the biggest overhead that real estate investors deal with is property taxes. Unfortunately, in Texas the county can raise real estate tax valuations on any property by as much as they want. An accurate and up-to-date appraisal can assist you in proving the true value of your property to the county appraisal district.
Sale of a Property
While it is common in Texas for the buying party to engage their own appraisal firm, with more complex properties it is often best for all parties to obtain their own appraisal. The accuracy of an appraisal for an investment property requires that the performing appraiser be well versed in replacement costs, gross monthly rent multipliers, cash reserves, operating income analysis, rental analysis and more.
Other common reasons for ordering an appraisal for an investment property include divorce, refinancing, equity loan and estate planning.
FREQUENTLY ASKED QUESTIONS
What is Gross Rent Multiplier?
GRM or Gross Monthly Rent Multiplier is a calculation used to determine a market valued based on the calculation of Sales Price / Potential Gross Income. The GRM is useful whenever you want to quickly compare income producing properties in a rather homogeneous area. As a simple calculation it does have its disadvantages since it does not take into account all factors that would influence value.
What is Capitalization Rate?
Cap rate for real estate is similar to GMRM but in reverse and using Net instead of Gross income. The formula looks like this Net Operating Income / Sales Price). Unlike GRM the cap rate brings operating expenses into the equation but it still has its disadvantages which could lead to inaccuracies due to unaccounted expenses.
What is Market Rent Analysis?
A rental analysis is typically performed as a separate addendum to a real estate appraisal. Recently rented properties, that are similar to the Subject, are compared and adjustments made to their rental prices based on their differences. These adjusted rental prices are reconciled into one value as Market Rent.
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