How To Value A Property (An Intermediate Guide)

Asian lady @GoodPlace

At the time of publication of this mini-guide, we have racked up some 2,700+ downloads of the How To Value A Property guide. It’s worth noting that the guide is NOT meant to replace the professional valuer’s service (yes, we did receive some rather peeved emails from people who probably thought that they would be out of a job soon), but it’s useful to give the prospective buyer an idea if an asking price is “worth it“.

If you haven’t downloaded your free copy of the How To Value A Property guide yet, leave me a message in the comment section below and I will get the latest version emailed to you.

In the property valuation guide, Uncle Patrick has outlined a simple framework on what’s commonly known as the “COMP (short for “comparison”) method” of valuation where the transacted prices of  “comparative” properties are used to estimate a property’s fair market value. In this short essay, we will go through a hypothetical example on how to collate transactional data in order to come up with a property’s fair market value.

Let’s imagine that you’re interested in buying a two-bedded, 831 sq ft apartment at “Stonor Residences” in the KLCC enclave. Remembering Uncle Patrick’s guidelines on choosing a comparative property, you quickly listed down the following criteria:-

  1. Transactional date. You’d narrow down the transactions to the last two to three months, but you’ll also consider older transactions in order to get a sufficiently large number of comparative properties to work with (at least eight).
  2. Size. Ideally the comparative properties should have the same size, or at least in the same range (about 200 sq ft for apartments).
  3. Configuration. Ideally the same number of bedrooms, bathrooms, etc.

You make a trip to JPPH and you conduct a search. However, for the past three months, there have only been four transactions for the 831 sq ft apartment that you are considering. Therefore, you broaden up your search to include all other sizes as well, and you then collate the data in the following table:-

"Stonor Residences" Transacted Prices & Configurations

NoUnit AddressTransacted PriceSize (SQ FT)Price PSFBedsBaths
1,096
112A-1-3997,2008311,20022
224-1-41,200,3881,20499732
39-2-41,009,0108311,21422
429-3-51,204,0001,2041,00032
522-2-32,304,6452,33598766
614-1-8929,8998311,11922
719-9-11,081,1318311,30122
821-1-31,145,0041,20495132

The average price PSF is RM1,096, but strictly speaking you should only consider the 831 sq ft apartments – the figure then stands to be a little more than RM1,200. This should be rough selling price that you should be comfortable with, but personally I’d revise that down too because the “next up” configuration, the 1,204 sq ft units were sold for a little less in terms of PSF.

What Next?

The “rough selling price” is not be all and end all to everything. With this price range you are now in a better position to filter out many options or listings you see at property portals, and once you are able to go for some on-site viewings then you’ll be able to tweak the price further:-

  1. Views. In the “Stonor Residences” example, does the unit have the coveted Petronas Twin Towers view? Or is it blocked by another condominium? This might also explain the discrepancy of RM100 PSF between transactions (6) and (7) in the table above.
  2. Condition. Will you need to fork out extra monies to fix up the place in order to make it habitable?
  3. Floor Level. This factor is important especially in KL city condominiums. Also, if the condominium sits on top of a retail component, the lower floors may suffer from noise problems.
  4. Neighbourhood. Are there new projects in the neighbourhood that will impact demand? Case in point: KL Trillion and Three28 on Jalan Tun Razak, Star Residences and The Mews on Jalan Yap Kwan Seng.
  5. Available Units. The more (legitimate! 1) listings, the more suppressed the prices would be.

Final tip: Get the overall “feel” for the market by talking to the people who keep their ears to the ground: the AGENTS! They are a wealth of knowledge and information that you will not be able to get by merely looking at transactional data. For example, a good agent will be able to tell you how fast the turnover rate is (i.e. how quickly the units are selling in the neighbourhood).

Building relationships with good agents takes time, but if you’d like me to introduce some (from our verified panel of agents) to you then let me know what your requirements are using our GoodPlace DealMatcher feature.

Remember that the transaction should make financial sense to you, and you should have an exit strategy a few years down the road (depending if you are a long- or short-term investor). In the meantime, working out how to generate cashflow from the property is a worthwhile exercise, and you’ll find yourself a winner if you are able to generate ongoing cash while waiting for capital appreciation.

  1. Beware of bait and switch schemes which are prevalent especially in the luxury property market!
About Khai Yin

When I am not writing for GoodPlace.my and helping my readers find properties though the DealMatcher service, I spend time doting on my three kids: Wenyi, Qinyi and Eian. My personal stuff, some published essays and contact details can be found at khaiyin.com

Comments

  1. jason vee says:

    hi

    Appreciate if you could send me a soft copy of the latest version of this guide.

    Many Thanks

    JVee

  2. Sajjad Hussain says:

    Hello good place.my,

    This is to request you to kindly email me your latest “HOW TO VALUE A PROPERTY GUIDE “.

    Many thanks,
    Sajjad

  3. Hi! Khai Yin,

    Kindly forward me with your latest copy of the ‘How Do You Value A Property Guide’

    Thanks with regards,
    See

  4. Hello Khai Yin, appreciate if you could send me latest copy of the guide. Thank you heaps! Keep writing!

  5. You make a trip to JPPH and you conduct a search.

    What’s JPPH?

  6. Hi Khai Yin,
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  7. Shirley Gui says:

    Would appreciate If you can send me a copy of the latest copy of how to value a property guide. Thank you.

  8. Hi! Khai Yin,

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    Thanks with regards,
    Ken

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  11. May I have a copy of your “How Do You Value A Property Guide”? Thank you

  12. Kindly send me free soft copy “How do you value a property guide ”
    Thank you,

  13. Hi Khai Yin,
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  14. raymond khaw says:

    Hi Khai Yin,
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  15. Hi..would be grateful if you could send me the latest guide on property valuation. Thanks.

  16. Rosalyn says:

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    Cheers,
    Rosalyn

  17. Hi Khai Yin,

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    Cheers,
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    Best Regards,
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  19. Dear Khai Yin,

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    Appreciate it!

    Thank you.

    Regards,
    Steve

  20. Dear Khai Yin
    Thanks for your sharing and very uaeful for getting start in property investment.

    Could you send me the a soft copy of how to value a property guide?

    Thank you vvery much.

  21. Dear Khai Yin,

    Thanks for the sharing 🙂
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    Regards,
    Mogala

  22. Hi Khai Yin,

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    Would also like to take this opportunity to thank you for all the insightful weekly advice. Been following up closely with your posts.

    Thanks again.

    Joseph

  23. Chin Lean says:

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  24. Hi! Khai Yin,

    Kindly forward me with your latest copy of the ‘How Do You Value A Property Guide’

    Thanks with regards,
    RD

  25. Hi,

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  26. Hi Khai Yin,

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    TQ

    Hasnah

  27. Hi,

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    Thank you,
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  28. Please may I have a copy too. Thank you.

    • Hi Khai Yin

      Appreciate if you could send me a copy of the property valuation guide.

      Many thanks

      Best regards
      Annie

  29. hi khai yin,

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    thank you,
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  30. Hi, can kindly email me the property valuation guide. Thanks a lot

  31. Hi Khai Yin,
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  32. Hi,
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    Thank you.

    Regards,
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  33. Charlie says:

    Hi there Khai Yin,

    I’m new to your blog and came here through your other website klcccondominiums.com.my.

    I’ve been reading quite abit of post on your blog and would like to ask you a question with regards to JPPH. Was reading through JPPH website http://www.jpph.gov.my/V2/index3service.php?versi=1&no_khidmat=2&no_item=1

    It seems that to get the the recent transaction of property, 1 have a be a qualify agent or valuer ? Or I’m reading from the wrong link?

  34. hi!
    I would love to have a copy of your latest version of report as it will be very useful to me!

    do send me a copy !

    thanks

  35. Khee Kuan says:

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  37. Hi Khai Yin, how are you? Kindly send me a copy of property valuation guide. Thank you.

  38. Hi Khai Yin,

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  39. Hi Khai Yin, you could send me latest copy of property valuation guide. TQVM

  40. jeffry fong says:

    Hello good place.my,

    This is to request you to kindly email me your latest “HOW TO VALUE A PROPERTY GUIDE “.

    Many thanks,
    Jeffry fong

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  46. Hi Khai Yin,

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  47. Hi Khai Yin,

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  48. Hi Khai Yin,

    This is to request you to kindly email me your latest “HOW TO VALUE A PROPERTY GUIDE”.
    thanks.

  49. Hi Khai Yin,

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  50. Khai Yin,

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  51. Would appreciate if you could kindly email me the latest How To Value A Property guide?

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  53. Alan Foong says:

    Hi Khai Yin,

    I would love to have a copy of how to value a property guide. Thanks

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  54. Hi Khai Yin,

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    Karen

  55. Frederick ho says:

    Hi,

    Appreciate if you send me the second part of how to value a property. Thanks.

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    Hi

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  57. Khee Kuan says:

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  58. jayce yap says:

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  59. could you please me the latest copy of “how to value a property” guide please. Thanks in advance

  60. Hi Khai Yin,

    Appreciate if you could send me the latest guide for property valuation.
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  61. Hi Khai Yin,

    Appreciate if you could send me the latest guide for property valuation.
    Many thanks.

    Belle

    (p/s: the email was incorrect in the previous comment)

  62. Dear Khai Yin,

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    Appreciate if you could send me a soft copy of the latest version of this property guide.
    Thanks in advance.

  63. Gwenda Latham says:

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  64. Vincent Ng says:

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    Thanks.

  65. Hello Khai Yin.
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  66. Hi

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  67. Hello,
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    Thank you in advance.

  68. Hi Khai Yin,

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  69. Hi Khai Yin,

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