I have always advised my clients to have their properties valued each year. It seems most people only use a Property Valuer when they have a statutory need i.e. a loan/ mortgage, a Partnership Dissolution / Separation or Divorce, Rating or Taxation dispute i.e. excessive council rate or Land Tax, Death i.e. Probate/ Estate purposes, Company Code/ Balance Sheet, Superannuation , Insurance or Capital Gains Tax Purposes.
There are many other circumstances where valuations are required by Government, Business or Individuals. From an individual, Company or SMSF asset wealth perspective, knowing your properties current value by virtue of a Certified Property Valuation is imperative. This is for many the largest investment they will have in their lives. Many other asset classes deliver this certainty.
You can check the current value of your Share Portfolio daily as you can with the price of Gold and other Commodities but it seems with property many of us seem to be complaisant.
We are asked to review the replacement cost for insurance purposes each year and contents policy to check that we are adequately covered.
As an Asset Manager I advise my Landlords to review their passing rental every 6 months, however with our largest asset, most do not hold a current market valuation in their bottom draw. In uncertain times like now, it’s incredibly important to know the current market value of our assets. I am not talking about a one line estimate here or an estate agents opinion.
I am saying we should all hold a Current Market Valuation of our property completed by a Certified Practising Valuer.This should be done annually and its relatively inexpensive in comparison to the certainty it delivers.
If you lose your job, get ill, separate from your partner then you can quickly ascertain more accurately the true financial position. This is vital if you need to sell, buy or are reviewing your borrowings with your mortgage broker. Some may need immediate financial assistance or seek to increase borrowings to create a buffer. During a crisis, it’s critical that we have head room and have enough funds in cash and redraw to navigate through difficult times.
From the year to March 2020 the Melbourne Median House price has risen approximately 12.5 %.
When asset prices are rising that is always a good time to have your assets revalued. It creates breathing space, security and gives confidence to the lender.
Some of my clients are doing this now.
Getting their houses valued, they might be looking for a loan, an increase in their redraw facility and remember there are many who rely on their redraw facility from their home to fund their business.
Banks have their loan to value ratios and usual credit criteria based on the Valuers opinion of current market value.
A higher valuation could mean a borrower could borrow more. A few people are doing this right now.
To the contrary, if housing prices fall in the future valuations too could be lower which will have the opposite effect.
To date property prices are holding up. It might however be a good time right now to have all of your property assets revalued.
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