Hi,
I want to follow john fitzgerald’s points in which he mentions buy an investment property where land should atleast be 30% of the total value of the property.
I was reading section 32 and contract of a property. There was a council valuation certification was attached depicting the
site value = $355,000 Capital Improved Value = $505,000, Net Annual Value = $25,250 Effective date of value = 25/01/2008Does this mean the site value = land value. The total price according to the council is $505,000 so does this means the land value in this property is equal to 70% of the total price.
I am a bit confused but wondering one of the property gurus can help me out.
The auction is this Sunday so please help me out. Value is around $500,000 – $550,000 or so,
Please let me know what you think.
Cheers
AbhishekLand value and ratings value are two totally separate types of values and do not relate to one another. Rating value is used by council to determine the amount of rates that you pay, land value is what the theoretical price of vacant land is once you take away the depreciated value of the improvements (buildings, sheds, garage, carports, paths, clotheslines, landscaping, pool etc).
To determine the value of the property (or the price that you will no longer be interested in purchasing) you need to assess the value of the house/improvements and have formed an opinion regards the land value. (Generally speaking I would not consider more than 50% of the value being tied up on the improvements).
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