Most real estate investments depend on getting a good appraisal – as does the financing that makes the acquisition even possible. This is definitely the case in the Short-Term Rental (STR) world, in order to maximize your Loan-to-Value.
The appraisal determines whether you get the valuation (and, thus, the loan proceeds) that you need to justify the deal. So, understanding the role of an appraiser is key, as is knowing how to get an appraisal that aligns with your desired property valuation. Whether for refinancing, selling, or purchasing, a property’s appraisal can significantly impact these processes.
An unexpected plug!: Diggifi happens to know a lot about appraisals, especially those that do STR deals! Get in touch with us here for a quick, free consult.
What Does an Appraiser Do?
An appraiser is a licensed professional who provides an objective valuation of a property. This valuation is crucial in various scenarios, including mortgage lending, property selling and taxation.
Core Functions of an Appraiser:
Thorough Property Inspection: Appraisers examine the property’s condition, taking note of any defects or features that can influence its value. Appraisal inspections are usually done inside-and-out, though there are some circumstances when you can request outside-only inspections. This can be important when buying in challenging circumstances, like at an auction.
Market Analysis and Comparables: Appraisal firms conduct a detailed market analysis, comparing the property with similar ones in the area, to gauge its market value accurately. Important to note in the Short Term Rental space (which is its own universe) – investors should seek out STR-friendly appraisers who are knowledgeable about STR-specific incomes, comps and comp data services (like AirDNA, Mashvisor, and Rabbu).
Report Compilation: The appraiser prepares a comprehensive report, detailing their findings and the estimated value of the property.
Maximizing Your Property’s Appraisal Value
Achieving a favorable appraisal is often a key goal for property owners. Here are some strategies to help support your desired valuation:
Property Preparation: Ensure your property is in the best possible condition. Address any repair needs, enhance curb appeal, and consider quick upgrades that can boost value.
Documentation of Improvements: Keep records of all renovations and improvements. These can increase the appraised value.
Research and Provide Comparables: Research relevant properties in your area that are similar and provide these comparables to the appraiser. Also, get knowledgeable about STR data services that provide market-level income estimates that help the appraiser properly value the property with its STR operation in mind.
Understand the Local Market: Being informed about your local real estate market helps in setting realistic expectations and understanding how your property fits within it.
Engage the Right Appraiser: Hiring an appraiser with specific expertise in the STR property type and local area can lead to a more accurate and favorable valuation.
Quote of the Day: Reflecting on Real Estate and Value 🌟
“Value in real estate goes beyond mere bricks and mortar; it’s the potential each property holds that truly defines its worth.” These are the words of esteemed property valuation expert Jameson Reid. This perspective is particularly relevant in the complex and nuanced world of property appraisals, where understanding and unlocking this potential can be the key to real estate success.
Conclusion: 🌟
Strong property appraisals help you get great RE loans. While Diggifi specializes in providing great financing solutions, we also know a thing-or-two about where to turn to get a STR-friendly appraisal done.
For those seeking to finance their real estate ventures, whether it’s purchasing, renovating, or refinancing properties, Diggifi’s expertise in quick and easy financing can be a game-changer. Connect with Diggifi to explore financing options.