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How Often Should Investment Property Be Revalued?

Hearing the word ‘revalue’ or ‘reassess’ may bring to mind racing thoughts of raised taxes. While many municipalities will revalue properties, which can lead to higher taxes, this isn’t always the case. Revaluing an investment property is vital to the long-term health and vitality of your business. Yet the greater question begs to be asked: just how often should your investment property be revalued?

Let’s dig deep into the subject of revaluing investment properties while untangling the different threads involved.

Introducing the Revaluation Model

There are multiple approaches to revaluing an investment property. The most common path is through the Revaluation Model, which gives businesses the chance to carry a (fixed) asset at its revalued amount. This value less its accumulated impairment losses and depreciation will reveal what we understand to be the asset’s fair value. For volatile investments, such as property, it is important to continually revalue on an annual basis.

Included in the initial property measurement should be its purchase price in addition to any attributable expenditure directly associated with the product, including taxes or fees. Do not include start-up expenses, any operating losses, or abnormal labor or waste involved with the project.

To work with professionals and to ensure the best valuation of your investment property, consider reaching out to the team at Strategic Properties for support.

What Does It Mean To Revalue Property?

As an entrepreneur looking to build your investment portfolio, there are many different things that you will have to handle. One of the more prevalent tasks that you must assess involves revaluing your property.

Revaluing a property includes taking a longer look at the market value of the building as well as any other assets. In doing so, the revaluation will either lead to an increase or a decrease in value, which will impact taxes, as well. This process is generally undertaken at least once per year, largely under the guidance of the International Financial Reporting Standards put in place by the IFRS.

What Can I Expect When I Revalue My Investment Property?

According to FRS 102, investors are required to fulfill a fair value property revaluation every single year. The frequency of this assessment is due in large part to the volatility of the market. While market volatility can create some level of subjectivity during the revaluation process, that isn’t always the case.

Investors of real estate can look to past sales for equitable properties in similar neighborhoods. In looking through this housing history, entrepreneurs can find some level of what to expect out of their revaluation.

How Often Should Investment Property Be Revalued?

Revaluing property is essential whether you are a property investor or simply a homeowner. With that being said, property investors are required to be revalued at each and every reporting date.

FRS 102 mandates this with the understanding that an investment property is any property held by an owner or lessee under a finance lease with the intention of earning rentals or capitol appreciation.

Aside from rental buildings, the government considers an investment property as a building used:

  • To Supply Goods or Services
  • For Purposes of Administration
  • For Sales During the Course of Business

Put plainly, you’ll need to have your investment property revalued once every year at a minimum.

About Strategic Properties

Strategic Properties Group LLC is a family-owned and locally-operated business based in Tampa. Strategic Properties specializes in all aspects of management, development, and leasing. Prioritizing exceptional customer service while utilizing years of industry experience, the team at Strategic Properties ensures that each client feels in control of their future investments.

Strategic Properties Group promises to offer

  • Better Service, Better Quality – Strategic Properties Group expects excellence from its team so they can meet the needs of their clients. Quality is the focus during each step of the process, from booking your first consultation to working on your next big investment.
  • Creative Knowledge – Years of industry experience combined with a creative and hardworking roster leads to innovation through knowledge. Strategic Properties Group has the capabilities of a larger firm with the creative touch of a boutique family business.
  • Key Services Offered – Strategic Properties Group offers commercial and residential management & leasing services throughout Tampa and the surrounding areas. In addition to these services, Strategic Properties can help its clients through construction services, investment guidance, and property maintenance.

To book your consultation or to learn more about what Strategic Properties Group can offer you, simply reach out to the team at your convenience.