by 
ryanthom
ANSWERS: 4
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One of the top ways to estimate the possible value of a house is to be aware of the local market. Fortunately, there are countless tools to help you do this. Using the internet and area papers, you can soon get an idea of the market worth for different types of homes in the area.
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The best way to calculate the best price for any real estate is very simple divide the asking price by the square footage. If a $250,000 home has a thousand square feet, then a square foot will be $250. This should be the standard cost of construction for 2009. Compare this to previous years' building costs.
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Do some basic research in that area, connect with the people around the place where you are planning to buy this will give you enough information on the current price trends in that place.
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The best methods I know are (a) SIMPLE and (b) ADVANCED. (a) Comparibles: look at the prices similar properties achieved. (b) Net present value: There is a theory that if you let (rented out) the property, you can take the NET PRESENT VALUE of all the future rental income in perpetuity and that should be equal to the price it is now. My advice is always look at HOW MUCH LAND you are buying - not just the square footage of the property or the number of bedrooms. It is LAND that is in short supply globally - not bedrooms (you can build upwards). The other thing to bear in mind is that it's better to buy the worst property on a good street than the best property on a bad street.
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