[et_pb_section admin_label=”Section_2_Text Left:” fullwidth=”off” specialty=”off” transparent_background=”off” background_color=”#f7f7f7″ allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” padding_mobile=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off”][et_pb_row admin_label=”Row” make_fullwidth=”off” use_custom_width=”on” width_unit=”on” use_custom_gutter=”off” padding_mobile=”on” allow_player_pause=”off” parallax=”off” parallax_method=”off” make_equal=”off” parallax_1=”off” parallax_method_1=”off” parallax_2=”off” parallax_method_2=”off” column_padding_mobile=”off” custom_width_px=”768px” custom_padding_last_edited=”on|phone” background_color=”#ffffff” custom_padding=”60px|60px|60px|60px” custom_padding_phone=”40px|20px|40px|20px”][et_pb_column type=”4_4″][et_pb_post_title admin_label=”8 Valuation Risk Factors Lenders Use” title=”on” meta=”on” author=”on” date=”on” categories=”off” comments=”off” featured_image=”on” featured_placement=”below” parallax_effect=”on” parallax_method=”on” text_orientation=”left” text_color=”dark” text_background=”off” text_bg_color=”rgba(255,255,255,0.9)” module_bg_color=”rgba(255,255,255,0)” use_border_color=”off” border_color=”#ffffff” border_style=”solid” disabled_on=”off|off|off” disabled=”off” custom_margin=”||40px|” title_font_size=”36px” title_font_size_phone=”28px” title_font_size_last_edited=”on|phone” title_text_color=”#00afff” meta_text_color=”#95989a”] [\/et_pb_post_title][et_pb_text admin_label=”Text_B:” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]<\/p>\n
While your personal situation; savings, credit, income, etc. play a part in a lender\u2019s decision, there is another type of risk factor that banks concern themselves with; valuation risks.<\/span><\/p>\n Lenders rate each factor on a scale from one to five, then make their finance decision based on both your personal situation and \u00a0valuation details of the investment property you\u2019re asking them to lend on.<\/span><\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_H3: ” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” header_font=”Open Sans||||” saved_tabs=”all”]<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_B:” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]<\/p>\n Is the property in a highly desired location? Is it close or far away from amenities? <\/span><\/p>\n Obviously the closer a property is to key amenities such as employment, transportation and education, the better the rating the suburb will receive.<\/span><\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_H3: ” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” header_font=”Open Sans||||” saved_tabs=”all”]<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_B:” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]<\/p>\n Properties in flooding and bush-fire zones will of course rate as a higher risk compared to properties in different suburbs.<\/span><\/p>\n In some cases, properties that are near power lines could pose some concern, however no consensus has been reached about their impact, so it may not even be a concern for your lender.<\/span><\/p>\n [\/et_pb_text][et_pb_image admin_label=”Image_384px” src=”https:\/\/www.trc-gorod.ru\/wp-content\/uploads\/2017\/02\/shutterstock_565578829.jpg” show_in_lightbox=”off” url_new_window=”off” use_overlay=”off” animation=”left” sticky=”off” align=”left” force_fullwidth=”off” always_center_on_mobile=”on” use_border_color=”off” border_color=”#ffffff” border_style=”solid” custom_css_main_element=”max-width: 384px;” title_text=”flooding zones”] [\/et_pb_image][et_pb_text admin_label=”Text_H3: ” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” header_font=”Open Sans||||” saved_tabs=”all”]<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_B:” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]<\/p>\n Newer homes will typically rate better than older homes, however if a home shows sign of good maintenance and any improvements are finished to a good standard, it can still attain a good rating.<\/span><\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_H3: ” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” header_font=”Open Sans||||” saved_tabs=”all”]<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_B:” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]<\/p>\n Issues such as zoning, title and access can impact the marketability of a property.<\/span><\/p>\n Lenders will want to ensure that each of these factors are satisfactory and that no outstanding problems can arise that will impact their investment.<\/span><\/p>\n [\/et_pb_text][et_pb_image admin_label=”Image_384px” src=”https:\/\/www.trc-gorod.ru\/wp-content\/uploads\/2017\/02\/shutterstock_308023556.jpg” show_in_lightbox=”off” url_new_window=”off” use_overlay=”off” animation=”left” sticky=”off” align=”left” force_fullwidth=”off” always_center_on_mobile=”on” use_border_color=”off” border_color=”#ffffff” border_style=”solid” custom_css_main_element=”max-width: 384px;” alt=”land size”] [\/et_pb_image][et_pb_text admin_label=”Text_H3: ” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” header_font=”Open Sans||||” saved_tabs=”all”]<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_B:” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]<\/p>\n Lenders want to know whether or not a suburb could be subject to market volatility.<\/span><\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_H3: ” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” header_font=”Open Sans||||” saved_tabs=”all”]<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_B:” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]<\/p>\n Lenders will often ask valuers about what\u2019s going on in the market and where it appears to be headed.<\/span><\/p>\n Bottom line, they want to know if they can expect a reduction in value in the next two to three years.<\/span><\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_H3: ” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” header_font=”Open Sans||||” saved_tabs=”all”]<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_B:” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]<\/p>\n Locations where there are very few employers and\/or where the employers are in a high turnover industry (e.g. mining) will rate as more of a risk than areas where there are a number of employers in a diverse range of industries.<\/span><\/p>\n [\/et_pb_text][et_pb_image admin_label=”Image_384px” src=”https:\/\/www.trc-gorod.ru\/wp-content\/uploads\/2017\/02\/shutterstock_471584135.jpg” show_in_lightbox=”off” url_new_window=”off” use_overlay=”off” animation=”left” sticky=”off” align=”left” force_fullwidth=”off” always_center_on_mobile=”on” use_border_color=”off” border_color=”#ffffff” border_style=”solid” custom_css_main_element=”max-width: 384px;” alt=”mining town”] [\/et_pb_image][et_pb_text admin_label=”Text_H3: ” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” header_font=”Open Sans||||” saved_tabs=”all”]<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_B:” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]<\/p>\n Where does your property lie in terms of saleability?<\/span><\/p>\n Lenders want to know that your investment property can be sold (and they can recoup their costs) in a reasonable amount of time should it become necessary.<\/span><\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_H3: ” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid” header_font=”Open Sans||||” saved_tabs=”all”]<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Text_B:” background_layout=”light” text_orientation=”left” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]<\/p>\n So if you\u2019re trying to choose an investment property, how do you avoid buying one that lenders would consider a high risk?<\/span><\/p>\n Buy a property that:<\/span><\/p>\n While there are no guarantees, if you know what valuers look for you\u2019ll be able to choose properties that will return lower risk ratings and that won\u2019t get knocked back by lenders.<\/span><\/p>\n If you\u2019re interested in investing in property, register to attend our next Property Investor Night.<\/strong><\/p>\n1.<\/span> Location<\/span><\/h3>\n
2.<\/span> Environmental<\/span><\/h3>\n
3.<\/span> Improvements<\/span><\/h3>\n
4.<\/span> Land size<\/span><\/h3>\n
5.<\/span> Volatility<\/span><\/h3>\n
6.<\/span> Market <\/span><\/h3>\n
7.<\/span> Local economic conditions<\/span><\/h3>\n
8.<\/span> Market sector<\/span><\/h3>\n
How to avoid buying a high risk property<\/span><\/h3>\n
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