What is value to you? On the surface a straight forward question but if you delve into this subject, really think about this, it becomes far more complex and deserving of time spent exploring your own ideas on value.
The dictionary defines value as follows:
1. the regard that something is held to deserve; the importance, worth, or usefulness of something.
In a mixed property market, like we find ourselves in now, the QUESTION I GET ASKED THE MOST; Is THERE value in the market? We see record breaking transactions one day and then data showing a decline in sales the next. To decide if there is value in the market or not, we need to decide, WHAT IS VALUE? And this will differ from person to person & company to company.
Let's look at two simple & more common ways to define property value:
When I compare like for like, does it cost the same, less or more?
For the same amount of money, will this property provide me with the same, less or more rental income?
In simple terms, we can all understand this, but life and the markets are not that simple.
Let’s look at Some factors that affect "value"
- Position in the market
- Lease Income/restrictions/term
- Interest rates
- Parking Cars, motorcycles & Bicycles
- Local and global economy
- Government Policies and Legislature
These are some of the factors that could impact or influence your "value" there are much more and will all be individual to you and your own personal views.
Deciding to invest or partake in the property market requires an understanding of these factors and you would benefit from taking the time to decide what your definition of ‘’value’’ will be, and getting the right team to help you ensure that your value factors are met.
Spend time defining your value requirements, get the right support and you can make an informed decision on value in any market.
Do not let others decide for you what you should use as "good value" it is your decision to make. If you do not see the value, it is not the opportunity for you, transversely this is how several great investors and developers find value, their definition and viewpoint is different know what value means to you before you take the next step.