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How to Compare Sales Research on Potential Investments

Comparable sales researchBefore you settle on an investment property it's advisable that you find accurate and timely comparable sales data.

This is  a great way to narrow down the most suitable houses for you.

If you are not sure what that  means, this article will explain everything you need to know.

Hope it helps!

What is Comparable Sales Research?

The recent selling prices of similar properties within the area are what determines comparable sales research.
These figures are used to help calculate an accurate valuation estimate of an investment property, with the assumption that your target property will sell at a similar price to other similar properties.

Active listings prices or pending sales are not included in these calculations, although you can also use these figures within your research, especially if you can take into account other data like average vendor discount.

It can be hard for property investors to access reliable comparable sales data, which in the past has has led to many buyers investing without completing their necessary research. 

You should consider these factors when using comparable sales in your research

Time of Sale

The accuracy of your research will depend on how close it is done to the time frame of the sale.
It's advised that you look for comparable sales data within the last six months or less.

Registered valuers and the financial institutions, also use this time-frame for their own valuations.  


The closer the comparable properties are to your target property, the better.

Ideally, comparing a property on the same street or within a few streets is best (within 400m – 800m), but if there have been no sales within that radius, then compare with similar properties in the same suburb. 

Also, when you do compare the sales of similar properties, make sure they have similar frontage.

You should avoid comparing a waterfront property with a property on a busy road.

Size comparable sales research

This includes the size of the property and the land. 

Usually the price of land per square meter is lower the bigger the size of the lot.

Therefore, comparing a 400m2 property with an 800m2 property and simply doubling the price is not a good idea.

Wherever possible, compare a property within a 10% or less variance in size.

Age, build and condition of property

Comparing properties of different ages can cause issues.  

Comparing a 10 year old property with a 30 year old one makes an accurate comparison more difficult as the quality of build, materials used and standard of finish will all have a bearing on the valuation estimate.

Try to find examples of properties built within five years of your target property, 

Pace the market is moving at

When the market is fairly stable, your research will be easier to carry out than if the market is moving and capital growth rates are rising or falling.

In this case, having access to median growth rates of similar properties within the area can help you ascertain an accurate valuation estimate.

A process to follow when using comparable sales data

If you are new to property investing, here are a few tips to carrying out your research:

  1. Define your criteria for selecting comparable properties 

  2. Assemble a list of comparable properties that meet your criteria.

  3. Carefully evaluate these properties and choose 5 – 7 that are most similar to your target property.

  4. Calculate the average value of these comparable properties, which will help decide upon a probable price range in which your target property sits.

Real Estate Investar members can use our My Valuer and My Research tools to help determine a market valuation estimate of any Australian residential property. 

Watch this 30 second video to learn more


Why is comparable sales research important?

It puts you in a much stronger position to negotiate with a seller. You can use this research to justify the price you are willing to pay for your target investment property. 
Having this data at your fingertips is also invaluable in other ways.  For example, it will help you decide which opportunities to avoid that could hamper your chances of building a profitable portfolio.

Real Estate Investar members use our suite of online property investment tools to help them carry out fast and accurate property investment research. For example, here are some of the features that our members have at their fingertips:

  • Unlimited market value estimates - work out the current market value of any residential property anywhere 24/7. Use the tools the banks use.

  • Take the guesswork out of buying - Whether buying at auction or by negotiation, you'll avoid paying too much - every time.

  • Use the latest in-depth, accurate property data that supersedes the incomplete and out-of-date standard property reports.

  • How long has it been on the market? How much did it sell for? What did they pay for it? Has it been discounted? Access all this information 24/7.

  • Access zoning, land size, features, demographics, population, average days on market, vacancy rates, rental yields, clearance rates and average discounting data.

You can take a free 21 day subscription trial to see for yourself the amazing results they can deliver for you.

Please use the comments below to tell us how you have used comparable sales research to help you with your negotiating. Thanks for reading, good luck with your research!  

James Lawrence
James Lawrence
James is the Marketing Manager at Real Estate Investar and has been with the company for over 10 years.

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