How to value residential property

cormoleary

Hi all

I’m looking for a new house and am scratching my head about how EAs arrive at valuation.

One house which needs moderation is currently bid to 610. Probably would need 100k to modernize it but ignoring that for a moment the estate agent gave me a rental quote which works out around at 3.5% gross before any deductions for expenses voids etc

Seems mad-any insights?

DubCount

In some markets (such as the UK), property sales and rental prices tend to track each other, and rental yields are fairly consistent. Ireland is just not like that. There tends to be big variations in rental yields.

The value of anything is what someone is prepared to pay. Some houses and areas are dominated by owner occupiers, and rental prices have little impact on prices. Trying to apply logic wont help much, because logic is not driving the demand.

JustLen

In general thr bigger and more expensive the house is, the lower the yield.

610k house that is rented for 1800 p/month = roughly 3.5% yield gross

But a 400k house might rent for 1600. Which would be roughly 4.8% gross.

*these are rough figures in my head that do not allow for acquisition costs.

A 1100 sq ft 3 bed will usually rent for almost the same as a 1250 sq ft 3 bed (all else being equall)

But the bigger house will be more expensive to buy.