How to Do Comparable Property Research (for Land Investing) To Determine A Property's True Market Value
- Real estate investing is like any other kind of investing – you need to buy low and sell high. So the key to successful real estate investing is not only about the price you sell the property for, but you also need to make sure that you buy the property at the right price well below market value so that you have your profit margin built in at the time you purchase the property.
The Investment Dominator has made it easy for investors to research land parcels, find out their true market value so that they can make offers accordingly.
Here’s how you can use these market research tools.
STEP 1- Set Property Zip Code
You can set the ‘Property Zip’ code one of three ways…
- The ‘Property Zip’ can be included in your initial import file into the system. See here for more details.
NOTE: Occasionally the property zip code in the Assessment Roll is incorrect, so even if you import the Property Zipcode initially from the County data we recommend that you verify that it is correct when the property is in the ‘Pending Preliminary Research’ status after the owner has requested an offer from you.
- You can use the ‘Set Property Location‘ option explained here.
- If the County provides you with that information you can add it manually following the instructions below…
- Go to ‘Land Deals‘ and click on the ‘Offer Requests’ Stage.
- Click the ‘Edit‘ link to the right of the record you would like to edit.
- Scroll down to the ‘Property Information‘ section and enter in a value under the ‘Property Zip‘ field.
- Click the ‘Update Record’ button to save the change.
After you have filled in this information, something cool happens – a new option under the Options menu called ‘Market Research‘ will appear. If you click the ‘Market Research‘ option, options for Realtor.com, Trulia.com, LandWatch.com, Zillow.com, Redfin.com, Craigslist.org, and LandsofAmerica.com will appear.
Click on one of these options to view the comparable listing maps for these popular real estate marketplaces to figure out the true market value of your property compared to what’s on the market or has been sold recently.
Recently sold properties are the best way to find out the market value of a property – in other words, what people are actually willing to pay for a property like the one you are looking at.
Average up the numbers given by the different sources, and you should have a reasonably accurate market value, and then you can use that number to make your offer.
For more information on the 4-ways we evaluate vacant land, please review module 8 of the Land Profit Generator course.