Posted by Joe on September 14, 2004 at 19:34:55:
I’ve just gotten back into investing, having been away from it for a while.
You need to find a quick way to do comps, regarding what is sold, and also what’s available if you have the time (and you don’t want to spend too much time).
If you know a Realtor, that would be helpful, but it’s really a bother to have to call them about every property. There are sites on the web, but I personally haven’t found any that work very well. Data Quick is probably not bad.
I have found a way to do it which takes a little bit of time, but is still relatively simple. I go to the county assessor’s site, and manually go through each property. It sounds like a joke, I’m sure to some, but it’s fine for me right now. If I become serious about a property, I can drive out there and see what else is available, and call the various companies to see what they’re listed for, or sometimes they have flyers stating how much, in a little brochure holder on the signs. Remember that solds are more accurate and more important than what’s on the market.
The main thing is that you have to compare similar square footages, or do some dividing and multiplying (math) if they’re not too far apart, and make sure that the sales are within a few months time frame.
Other factors such as pools can make a difference, and I usually allow $12,000 to $15,000 for a pool.
Also watch out for garage conversions, because that’s a way for people to bump their square footage, but they have lost their garage.
Remember, don’t overcomplicate it…you have to learn to do it as fast as possible, otherwise it will consume too much time.
You can also learn to get ballpark perceptions of value simply by looking at “per square foot” costs. In other words, find out what things are selling for in your area, in various neighborhoods. Where I am, for example, $100 per square foot wouldn’t be a bad deal. That could let me know whether or not I want to even pursue comping it any further, or doing more research.
Hope this helps.