Property Evaluation

The comparable method is the most basic and commonly used method of value estimation for single-family homes. Other Evaluations In addition to the standard evaluation techniques of comparables, appraisals, tax assessments, and courthouse records to determine fair market value, properties can be evaluated in a number of other ways. Most evaluate the return on investment or are used to code an ideal property. There is a number of quick and easy coding systems that can help you evaluate properties:

1. Quick Appraisal
The quick appraisal system codes mid range properties. This is a simple A B C system. The ‘A’ property is the middle range property in your community, the ideal property for resale and marketing.
2. Conversion Ratio
The conversion ratio is a simple system of looking at the cash invested into the property and the equity of the property. Anytime you can find an investment that returns three times the equity of the property, generally the property is a good choice. Even if the market moves down, the equity is substantial.
3. Profit Margin

The profit margin of a property is the fair market value minus the purchase price and is quoted as a percentage. A 40% - 50% profit margin is a fair deal with room for error. Even if the property needs work there is usually room for profit.