Selling and evaluate your property in Saranda, Albania is one of the most difficult decisions you can make. Your reasons might vary, you could be looking to flip it for a profit, have personal motivations, or want to upgrade to a better property that offers higher income potential. The first questions that arise are: What is the best value i can sell it? Let’s go over the components that you should consider as value indicators for your property.
Property Management
Imagine your property currently earns €17,000 annually. With better management, it could earn €20,000 annually. The capitalization rate (cap rate) is 6.5%. Here’s how you can calculate the property’s value:
1. Current Property Value:
Value = Annual Income/ Cap Rate
Value = 17, 000 /0.065 = 261, 538 euros
2. Improved Property Value:
Value = 20, 000 / 0.065 = 307, 693 euros
3. Difference:↓
307,693 – 261,538 = 46, 155 euros
Location, Location, Location
Now, let’s talk location. Say your property’s real value based on current market conditions is 307,693 euros, but it’s in a fantastic spot. Maybe it’s an area where property values are climbing, and rental income is on the rise. Since we’re talking about selling the future potential, you can definitely aim for a higher price because of that prime location.
But hold on, there’s more. The exact spot of your property matters too. If it’s in a unique place, like right by the sea with direct access and properties like yours rarely hit the market, you can think about setting an even higher price. You’re not just selling four walls and a roof, you’re selling a lifestyle. For some people, having what you offer is a dream come true, and they’re willing to pay a higher price for it. Maybe they don’t even care about the investment aspect, they just want that perfect property for themselves.
So, the lesson here? Location and amenities are key. But remember, your price still needs to be reasonable. You don’t want to price it so high that it sits on the market forever. Find that sweet spot, and you’ll attract the right buyers without scaring them away.
Checking the Market and Competitors’ Prices
Always keep an eye on the market and what others are charging. You can’t just take everyone’s prices for granted, but they do give you an idea of the supply and demand dynamics.
First, do some detective work to evaluate property in Saranda, Albania. Check out similar properties in your area to get an idea. Look at how long they’ve been on the market. If something’s been sitting for months, it might be overpriced. On the other hand, if places are selling quickly, there’s likely high demand you can tap into. Remember, listed prices aren’t always the final sale prices. Some sellers list high to negotiate down, while others list low to start a bidding war. So, dig deeper and compare actual sale prices, not just asking prices. Keep an eye on market trends. Are prices rising or falling? Is there new construction increasing supply? Understanding these trends helps you set a competitive yet realistic price.
Also, compare the condition and features of your property to others. Maybe your place has a renovated kitchen or a better view, which can justify a higher price. Don’t rely solely on numbers and formulas. Get a feel for the market by talking to local agents, attending open houses, and understanding buyer preferences.
Timing the Market
I’ll start with a quote from Warren Buffet: “You can’t beat the market, but you can beat yourself.” That’s the mindset I want you to have as we move forward. Trying to beat the market often leads to failure, so instead, we need to adjust to the market and do our research to evaluate property in Saranda, Albania.
So, when is the right time to sell a property? Sometimes there isn’t a perfect time. Some people are heavy holders, like me, who aim to maximize cash flow, while others prefer flipping properties for a quick profit.
If we look at the last five years in Saranda, the hottest city for investment, property prices have increased by about 250% on average. Now, they continue to rise by about 20% per year, driven by high demand. It’s tough to find a good apartment with a sea view close to the shore because people hesitate to sell. They expect the market to keep growing and enjoy substantial rental income in the meantime. This behavior shows that understanding people’s psychology and actions can give you valuable insights. Always ask your agent and do your research.
Global Events as an Indicator
World events like wars and pandemics have also significantly impacted prices. After the war in Ukraine, everything doubled because the cost of building materials skyrocketed, pushing up property prices. The demand is real, and properties with sea views are often sold even before construction begins. This healthy supply and demand situation means that scarcity creates value, driving prices higher.
Check Neighboring Countries
When considering when to sell, check the rental income as an indicator using property value and cap rate formulas. But don’t just look at the local market, take a broader view. Look at how countries like Montenegro, Greece, and Spain have performed in similar stages. Some of these countries are at their peak, with declining sales and prices due to high costs. In contrast, Albania still offers reasonable prices for investment, appealing to both rich and average investors.
Ultimately, the timing to sell depends on your personal goals. If you’re flipping for quick profits, you can sell whenever you meet your targets. Always keep in mind the various factors at play, from local demand and global events to broader economic trends.
