Truly the best way is to have YOUR REALTOR - LIKE ME help you with recent sold comparable properties that have sold and adjusting those based on items of value and items that detract from value.
GO MOBILE - visit http://gomobile.njpads.com and search for a specific home/rental or search near your current location - FULL MLS DETAILS!
John W. Davis Jr., VREP
RE/MAX Village Square - Upper Montclair
Office: 973-509-2222 x174
Fax: (888) 225-8039
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Customized Market Information: http://market.njpads.com
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When you cannot find something available in an area that equates to the US long term historical mean, then that shows you the entire area is overpriced. The beauty of this average is that it takes into account all factors such as location, popularity, school districts, etc. because it uses same area rents as a compare.
Long story, short... wait to buy until we get to more realistic valuations if you must occupy your selected area. Because it's just a matter of time before these people lose their shirts without govt interference and manipulation of rates and home buyer credits.
Carl Witzig- Sales Agent
Uopper Montclair- 973 746-1515 ext 216
Then look at the "Sale Date Histories". (you need to know "PREVIOUS" # of owners)
Request from Seller a CLUE Report. (Insurance info)
Requested Warantee info. (if any)
Request update info. in regard to repairs. (if any)
How much Tax/Listing Price/INS (you will pay per month): with ALL of the above history in mind....= worth.
Note: Always pay less, because the house is only worth as much as someone is willing to buy.
The GRM is a capitalization method for figuring the rough value of a property.
Value = Potential Annual Gross Income X Gross Rent Multiplier
GRM's can vary considerably depending on the location: Trenton is lower than Hoboken. It also needs to reflect interest rates because a property might be profitable at 14 times rent when interest rates are low, but lose money at 8 times rent when interest rates are expensive . The old investor â€œrule of thumbâ€ was to never buy a property with a GRM greater than 8. It is best to use the GRM as a guide in comparing different rental investment properties in the same area.
You should also look at the Capitalization Rate or â€œCap Rateâ€ which is another ratio used to estimate the value of income producing properties. The cap rate is the net operating income divided by the sales price or value of a property expressed as a percentage. For example, if a building is purchased for a $500,000 sale price and it produces $40,000 in positive net operating income (the amount left over after the fixed costs and variable costs are subtracted from gross lease income during one year), then: $40,000 / $500,000 = 0.08 = 8%. The Cap Rate is then 8%. Use both of these ratios in comparing investment properties.
Also, do not put too much stake in Zillow's Zestimates here in New Jersey. Zillow uses sold data and tax data base information to calculate their Zestimates for a specific property. New Jersey's Property Tax data does not include number of bedrooms, baths and garage information on a property as do the tax databases in many other states.