CW 732 Michael Thomsett - Real Estate Market Valuation and Analysis

Jason’s guest, Michael Thomsett has over 35-years as an Accountant and is an investor in the most tax-favored asset class in the U.S., income properties. Mr. Thomsett has written over 90 books. His book, The Landlord’s Financial Toolkit will soon be printed as a second edition and re-named The Real Estate Investor’s Financial Toolkit. During today’s episode, he shares ten principles of real estate evaluations and unpacks each principle, so even those with a limited understanding of income property investing can follow along.  

Michael Thomsett Guest Interview:

[11:46] The 9/10 Principles of Real Estate Evaluation.

[12:54] Defining the Principles of Progression and Regression.  

[14:09] The Principle of Conformity is keeping the features of a property in line with others in the area.

[15:11] The Principle of Substitution relates to the condition of the property.

[15:45] The Principle of Change applies to the economy, demographics, employment, and other “fact of life” incidents.

[16:46] The Evaluation Principle of anticipation is when expectations about future events affect the market value.

[20:24] The Contribution Principle - If the improvement is worth more than the cost to make it.

[21:46] Plottage or Growth Management should be consistent use of the surrounding lands.

[24:26] Highest and Best Use - Real Estate evaluations are best when land is utilized in the best possible way.

[26:13] The Competition Principle states an opportunity for a profitable investment leads to competition.  

[31:47] All the necessary tools for landlords are included in the second edition of Michael Thomsett’s book.