As a small business owner, you Nitschke Nancarrow Accountants may not think that property valuations are all that important. After all, you probably bought your property for a set price, and as long as you’re making your mortgage payments, everything should be fine, right?
Wrong. Property valuations are actually quite important, especially if you’re thinking about selling your business or taking out a loan. Here’s why:
1. You need to know what your property is worth
If you’re thinking about selling your business, you need to know how much your property is worth. This way, you can set a realistic asking price and avoid leaving money on the table.
A professional property valuation will take into account the location, condition, and features of your property to come up with an accurate estimate of its worth. This is information that you simply can’t get from looking at comparable sales in the area.
2. You need to know what your collateral is worth
If you’re looking to take out a loan, the lender is going to want to know the value of your property so they can determine how much they’re willing to lend you. This is because your property will be used as collateral for the loan.
If the property is valued at less than the loan amount, the lender will be at risk of losing money if you default on the loan. As such, they’ll be much more hesitant to lend you the money in the first place.
3. You need to know how much equity you have
If you own your property outright, you have 100% equity in it. But if you have a mortgage, your equity will be lower.
Knowing your equity is important because it will give you an idea of how much money you can borrow against your property if you ever need to. For example, if you have a $100,000 mortgage on a property that’s worth $200,000, you have $100,000 in equity. This means you can potentially borrow up to $100,000 against your property.
4. You need to know how much your property has appreciated
Over time, your property is likely to increase in value. This is