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Make better investment decisions
with a commercial real estate valuation model
Discover how to achieve better investment outcomes by understanding commercial property valuation models.
How does a commercial real estate valuation model assist you in purchasing a commercial property?
Are you eager to buy your first commercial property? Before closing a deal, it’s important that you conduct a thorough property valuation to determine the fair market value of the property. This will help you negotiate the best price and avoid overpaying.
Remember, the final purchase value of your commercial property can differ significantly from its original listing price. So, think of property valuation as a performance appraisal, only applied to assessing a property’s overall value.
The appraisal of a commercial property is typically more subjective. Do you notice a crack in the walls? A leaking ceiling? How about the market forecast for the commercial property’s location?
It might seem difficult to consider all these factors and determine a good price for the property you want to purchase. That's what commercial real estate valuation models are for!
Here are 4 ways commercial property valuation models can help you in your investment journey.
How commercial property valuation models facilitate better investment decision-making
They help decide the right price
Commercial property valuation uses various commercial real estate valuation models, including the sales comparison approach, income approach, and cost approach to estimate the fair market value of a property. This ensures that you are not forking out extra for a commercial property. You can also negotiate for a better property purchase price with an accurate valuation.
They help make better financing decisions
If you’re not buying a property outright, lenders often require a valuation report to decide the suitable financing option and loan amount. With widely accepted valuation models, you can better assess the value of the property you want to purchase and submit a valuation report to lenders. This can also help should you wish to negotiate for better loan terms.
They facilitate better risk assessments
Using a trusted valuation model enables you to consider critical factors and risks that can influence the commercial property’s final purchasing price. These may include location, market conditions, the condition of the property, and lease terms. By understanding potential risks associated with the property, you can accurately determine the property value.
They help determine tax and accounting benefits
You should always consider commercial property taxes when you’re investing in real estate. Conducting a thorough property valuation using Government-approved property valuation models lets you understand the tax implications and consequences of your investment decisions. Using this information, you can optimise your tax strategy to benefit you financially.
Why work with Unikorn
Many Australian investors are hesitant to invest in commercial property despite the many benefits it provides, including higher rental yields, longer lease contracts, and net positive cashflow.
At Unikorn, we’ve made it our mission to help Australian investors experience the benefits of commercial property investing. We have assembled a team of experts who will provide property investment education and help you navigate the entire investment journey to become a successful commercial property investor.1000+
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Want to get started with commercial property investing? Our experts can help you!
FAQs
Most of the time, you won’t have to do the valuation. If you’re new to commercial property investing, you can seek the expertise of a commercial property valuer or buyer’s agent. They will have the knowledge and experience to accurately value any commercial property.
Valuation models provide estimates based on the current market data and assumptions. While they cannot predict future values, they can assist investors in making informed decisions based on their expectations of future market conditions.
Helen Tarrant, a property expert with more than 10 years of experience will show you the ropes to making educated decisions in commercial property investing.
Book a strategy session with us, today! Click here