January 4th, 2020 5:45 AM by Eric Willner
Radio Show Notes 12/30/19 Monday: Back To The Fundamentals To Start Out A Great 2020 – Will The Real Market Value Please Stand Up
By Eric Willner, Host of The Real Estate Show, America’s longest running daily radio show about real estate.
Monday begins a new week, which starts a new month, a New Year to a new decade. It’s a really big deal! And we are on a Mission for 2020 at The Real Estate Show! Will you join us on our journey? It’s gonna be great!
Last week he stressed how You Gotta Clean It Up To Take It Up in 2020. By that he means that for a strong fresh start, you need to clear out the noise, eliminate the clutter, and start with a clean slate to really get a good start in the New Year.
Today, Radio Show Host, Eric Willner discusses the five, (yes 5!) different types of property values and what each one of them means. Each one has a different stakeholder, and each valuation via a different method. Each one has a different purpose, and therefore a special stakeholder in the outcome. Here goes:
Assessed Value is the value amount placed on a home by a municipality to calculate property taxes. Who benefits from the outcome of this value? Tax Assessment Office. A part of the government which needs the money to operate and provide services. Because they influence the assessed value or the tax rate for political and budget reasons, the assessed value is seldom the same as real market value.
Depreciated Value is Value calculated for income tax purposes to determine basis for taxable amount. Who is the stakeholder? The IRS, of course. This value can also be influenced depending on the current goals of the government. Accelerated depreciation programs have been used by the Federal government to stimulate the economy.
Investment Value is the value attributed to property based on its returns. There are several ways to calculate it depending on the investment goals. One way to determine investment value is calculate the return on the amount invested (ROI). The higher the ROI, the better the investment value. Another way to determine the investment value is to apply a capitalization rate to the Net Operating Income (NOI). Again the higher the better. Who is the stakeholder? The investor who calculates it.
List Price value is the amount for which an owner has offered to sell a property. This is what is often found on the MLS. Who is the stakeholder in this value? The owner! What is this based on? I frequently wonder the same thing. What do you say?
Up until now, did you notice that one party made the determination of these values. They are one sided calculations with different objectives.
Market Value is the purchase price agreed to by a ready, willing, and able buyer AND a ready, willing, and able seller of a transaction that has closed. It is also referred to as the “meeting of minds”, not under duress.
When buying a property, which should you use? As a homeowner? As an investor? Tell me your thoughts?
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Want more? If you are serious about real estate and paying off debt, then find out more on today and every day’s episodes and learn more about Real Estate Investing and learn HOW TO by listening to The Real Estate Show with Eric Willner. The Show is Live every weekday morning at 8 o’clock (EST) on Florida’s Money Talk Radio station WSBR AM740, FM 96.9, and FM 103.9. You can also hear us on the free apps: iHeart Radio and TuneIn. Recorded Rebroadcasts are available 24/7 on Facebook. Please share this and our Facebook updates.
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Eric Willner is the Host and Founder of The Real Estate Show, an informative show about how to buy, own, and improve real estate the right way, on autopilot. - The Automatic Landlord way. (AutomaticLandlord.com) You can reach Eric Willner at Eric@Ericwillner.com or 888-595-7779.
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