Property appraising historically has taken three approaches:
1. The Cost Approach
2. The Sales Comparison Approach
3. The Income Capitalization Approach
Motivations for acquiring an appraisal are to obtain financing when buying property, determine the appropriate price when selling, to gauge the amount of tax one should pay based on valuation, and as an investor to stay current with market.
Beyond the intangible benefits of material comfort, pride, and security that come from owning real estate is the permanence of land and the attachments thereon. Unlike other assets and investments, land and property tend to appreciate in value, particularly in the state of Florida.
The financial benefits of owning your own home, possessing rental income from investment properties, and capital gains from accrued appreciation over time all make real estate a noteworthy investment be it for family or financial reasons. Nevertheless the speculative nature of anything so commonly owned and so readily emotionally invested in as well give room for fluctuating values based on what the market will bear.
When snow birds and Europeans on vacation in Florida suddenly began buying second homes in the sunshine state, prices began to go up. Years later prices are beginning to level out and decline as the economy slows. Such are factors and variables that effect property values.
Within the residential market, the sales comparison approach is the one most commonly used. This is the approach most counties and municipalities use when assessing home values when it is time to collect property taxes every year. By no means is the use of the cost approach a surprise, considering local governments usually find it increases annually when they collect property taxes.
Knowledgeable homeowners and savvy investors employ property appraisers to help them in the buying, selling, and refinance process as doing so has proven both profitable and prudent.
Paul Davis is Central Florida’s favorite and most reputable property appraiser frequently called upon by banks, homeowners, and savvy real estate investors to assess property values. A builder for over twenty years and also a real estate broker, Paul Davis brings a wealth of knowledge to the table as an appraiser.
Paul’s company Midstate Appraisals serves Central Florida (Lake, Orange, Seminole, Osceola, Sumter and Davenport in Polk counties).
Contact Paul Davis and Midstate Appraisals for your next appraisal: