There are indeed a couple of methods on how to get proper property valuations - each has its pros and cons. Oftentimes, the method will change depending on whether you are buying, building or selling the property in question and despite various misperceptions, valuations of property can actually alter depending on what method was used.
Here are some of the most popular valuation methods:
Comparative method - This method of valuation involves comparing similar types of houses within a given area in order to judge the relative value of any particular one. This is oftentimes used to achieve the Open Market Value. For this method to become effective, it is very important to know the actual sales prices of the properties.
Repayment Method - This method aims to repay the price of the property within 12-15 years basing it on its income. This can be modified by taking into consideration taxes due, repair costs or rental, vacancy periods and capital which increase over time. When an investor were to sell the property at the end of a 20 year investment term, the gross profit would be the rent over the last 5 years apart from the capital appreciation that occurred over the entire 20 year term.
Investment valuation - This is calculated using the yield from the property. The higher the yield, the greater the return on your investment and using an investment valuation is very useful in comparing the returns on a property to other investments like equity, bonds, stocks or perhaps even interest deposit accounts.
Residual Value - This is another common method of valuation which in terms of property development, calculated the value somebody might be prepared for a plot of development land. The residual value is oftentimes useful when it comes to calculating whether a profit can be achieved on a development.
Base value or Cost method - The base value of a property is actually the simple cost of the site it is built on along with the cost of building the property itself. Included in the cost of building are fit out, ฝากขายทาวน์เฮ้าส์ any taxes due and labour. The base cost is usually a great starting point for valuations required for scheduling, budgeting and insurance. Know that the reinstatement cost which is used for insurance purposes are an extension of the base value that allows for demolition and site clearance fees. However, in the reinstatement cost, the price of the land is not yet included. For more info, visit this site.
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