How to estimate the value of your property?

Sep 24, 2024

A lovely house with a beautiful lawn

Correctly estimating the value of your property is an essential step to successfully selling or investing.

Whether you are an owner looking to sell or an investor seeking to evaluate a property, knowing the fair value of your property allows you to set a competitive price and attract potential buyers or tenants.

This article will guide you through the different methods and criteria to best estimate the value of your property.

Why estimate the value of your property?

An accurate estimate of your property's value is crucial for several reasons. It not only allows you to sell at the right price but also to make informed decisions about the future of your real estate assets.

Sell quickly at the right price

Setting a realistic price from the start attracts serious buyers. An overvalued property risks staying on the market longer, while an undervalued property could cost you money. Thus, estimation helps you find the balance for a quick and profitable sale.

Evaluate your assets

If you wish to refinance or plan a future investment, knowing the value of your property is essential. It allows you to have a precise idea of your net worth and make decisions accordingly.

Prepare a succession or inheritance

In the context of a succession or donation, an accurate property valuation is often required to avoid misunderstandings or disputes. It allows for an equitable distribution of value among heirs and simplifies tax procedures.

Methods for estimating a property

There are several methods to estimate the value of your property. Each is based on specific criteria, and the choice of method depends on the type of property, its location, and your objectives.

Comparing market prices

The most common method is to compare your property with similar properties recently sold in the same geographical area. This method, called market price comparison, is often used by real estate agencies. It relies on the analysis of similar properties in terms of area, location, characteristics, and overall condition.

If you own a 100 m² apartment in a neighborhood of Casablanca, you can compare the recent sale prices of similar apartments in the same neighborhood to get a reliable estimate.

Online estimation

Today, many real estate platforms offer online estimation tools. These tools use databases of real estate transactions to provide an approximate price estimate of your property based on its location, size, and features. Although convenient and quick, this method is often less precise than an evaluation conducted by a professional.

Valuation by a real estate expert

Hiring a real estate expert is a more precise method, especially for specific properties like villas or luxury properties. A real estate expert takes into account all essential criteria such as location, area, condition, market trends, and amenities. This evaluation is particularly recommended for complex or atypical properties, where an online estimate is insufficient.

Income capitalization method

This method is mainly used for rental properties. It consists of estimating the value of the property based on the rental income it generates. The calculation is based on the ratio between the annual rental income and an expected rate of return. This method is ideal for investors looking to evaluate the profitability of a property.

If an apartment generates MAD 72,000 annually in rent and the expected return rate is 6%, the estimated value of the property would be: Value = Rental Income / Return Rate = 72,000 / 0.06 = MAD 1,200,000.

The criteria to consider for estimating the value of your property

Regardless of the method used, certain criteria play a key role in estimating a property's value. Here are the main factors that influence the value of your property.

Geographical location

The location is undoubtedly the most important criterion in estimating a property's value. An apartment or house located in a sought-after neighborhood, close to amenities (transport, schools, shops), will have a higher value than a similar property located on the outskirts or in a less sought-after area.

A property located in a central neighborhood of Casablanca, such as Maarif or Gauthier, will have a higher value than a similar property located in the suburbs.

Area and layout

The living space is an essential criterion in calculating the value of a property. The more spacious the property, the higher its value. Similarly, the layout of the rooms plays an important role: a well-laid-out apartment, with well-distributed rooms, will be more attractive.

The general condition of the property

The general condition of the property directly influences its value. A property in good condition, without any repairs needed, is generally valued higher than a property requiring renovations. Recent work (renovation of the kitchen, bathroom, window replacement, etc.) can significantly increase the value of your property.

Equipment and services

The equipment and services available in the building or neighborhood can also impact the value of your property. For example, the presence of an elevator, a parking space, 24/7 security, or a garden can be a major asset for the buyer or tenant. These amenities increase the perceived value of the property, especially in big cities.

The evolution of the local market

Finally, it is important to consider the trends in the local real estate market. If prices are rising in your area, this can work in your favor during the estimation. Conversely, in a declining market, it may be more difficult to obtain a high price.

Calling a professional for an accurate estimation

Although online estimation tools are convenient, nothing beats the opinion of a professional to accurately estimate the value of your property. Contacting a real estate agency or an expert allows you to benefit from their expertise and knowledge of the local market. Moreover, they can advise you on the best strategy to sell your property at the right price.

Conclusion: Good estimation for a good sale

Estimating the value of your property is a key step in a successful sale or investment.

Whether you use a comparative method, online tools, or call an expert, it's important to consider all the criteria that influence the property's value, including location, area, general condition, and amenities.

An accurate estimation allows you to set a competitive price and attract buyers or tenants quickly.

Do you want to get a reliable estimate of your property? Check out the valuation services offered by Housing Place and have your property appraised by professionals in the Moroccan real estate market.