If you buy a Long island real estate property, you should know its value so that the price being quoted is not above its worth. To know its value, you should determine the amount of money it should make. Other factors to consider which are also vital are age and demographics.
Know the location and legal description of the real estate property. Know its present condition so that you will know the kind of repairs you need to invest in. Check it properly and see if there are unauthorized dwellers there. Vacant properties are sometimes inhabited by these unauthorized dwellers.
Go to the office on property tax appraisal and check the property’s records. Remember that every county has a tax authority reporting a commercial and residential property. Hire a certified appraiser having experience in conducting a review that is comprehensive and independent.
Know the sum of money your Long island real estate property shall make. In order to get to its NOI or net operating income, know the difference of the total income it brings in such as fees and rent and then take away from this amount the expenditures. This kind of income is not your profit but it is your pre-taxes and it will tell you the amount of money your property takes in.
The next thing to calculate is the capitalization rate where you shall divide your NOI with the FMV or fair market value, your sale price or the amount asked for. The FMV shall be quoted to you by your agent specializing in commercial real estate properties. The percentage you get is usually six to ten percent. You should then divide the whole of your NOI with your capitalization rate. The number you get shall be the property’s value.
In valuing your commercial real estate, you should also determine the economics and demographics of the place. If the area is booming, the property may be more valuable in the future. It would then be wise to pay more than its current value. It may be costly now but it may be more cost efficient in the long run. This shall give you more profits.
Know the age of the real estate property. It shall sell for more if it is new and well-constructed. If it is old and dilapidated, you may spend more money to make it fully operational, so the property cost would have to be brought down.
Assess the maintenance cost of the property. Check tax obligations, incentives or exemptions. There are many counties that give tax credits to those businesses stimulating the economy of the locality such as job creations. Compute any material or equipment’s depreciated cost.
These are the tips you should know in valuing Long island real estate.