Appraisal Values

[Mike Saidi]

In Houston, Texas sale price for every house in market is about 30% over the appraisal value. Is it still good idea to buy rental property? and If it is should you estimate that the house future value will be raised based on what you paid, or appraised value which is 30% less than purchase value?

[Account Closed]

Originally posted by @Mike Saidi:

In Houston, Texas sale price for every house in market is about 30% over the appraisal value. Is it still good idea to buy rental property? and If it is should you estimate that the house future value will be raised based on what you paid, or appraised value which is 30% less than purchase value?

Appraisals are based on closed sales.  Are you confusing "assessed" values?  Generally there is a lag from purchase to reported sale so if properties are actually selling for 30% more than appraised value (based on sales 30-60-90days ago) then your market is HOT!.   Even then an appraisal should comment on new not yet closed sales and can even make a time adjustment on older closed sales to come close to actual market value in their appraisal.