Benefits of Property Valuation Services

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Benefits of Property Valuation Services
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• What are the benefits of property valuation
  services? There are several benefits to using
  this service.
• Sellers or buyers can take advantage of property
  valuation services in the following ways

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• Measure the current market value of the property.
• Give a detailed report of the property.
• Highlight the benefits of the property.
• Highlight the geographical advantage.
• Get expert advice and pointers to sell your home.
• Determining the feasibility of future development
  projects
• To determine the profitability and income
  potential of the property.

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Valuation Techniques

• When conducting a property valuation, a property
  valuer may use a variety of valuation methods.
• To arrive at the valuation figure, the property
  valuer typically uses the comparative method,
  investment method, and profits method.
• Some properties may require a more detailed
  analysis to provide additional flexibility in the
  property's end value.
• The five methods of property valuation are listed
  below

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Comparative Approach

• This methodology, also known as Inferred Analysis
  of Property Value, compares the prices of
  properties in the same area.
• The final value of the property is calculated
  using the values of nearby properties.
• A close examination of similar buildings/propertie
  s with matching characteristics and dimensions is
  performed using this method.
• When determining the market value of a
  residential property, the comparative method is
  commonly used.

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Profits Approach

• Profits Methods are frequently used when valuing
  commercial real estate.
• This method is used to determine the market value
  of properties such as restaurants, rental office
  space, malls, and hotels.
• The valuer determines the property's market value
  by averaging the business's average operating
  income over the previous three years.
• The profit and loss statement of the company is
  used to secure this figure.

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Residual Method

• This valuation method is useful when an investor,
  developer, or owner is determining the value of a
  property for future development.
• The Residual Method helps in examining the
  viability of a property, whether it has potential
  for development, redevelopment, or rental
  purposes.
• When calculating the property value, the gross
  development cost, building cost, property
  builder/developer profit, and fees are all taken
  into account.

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Contractor's Approach

• The Contractor's Method, also known as the Cost
  Method, employs the replacement value of the
  property technique.
• This method is used when the Comparative Method
  and the Profit Method fail to provide an accurate
  estimate of the property.
• Each construction component, cost of each
  construction, current construction techniques,
  land value, and reconstruction cost are all added
  together in this method.
• To arrive at the final estimate of the property's
  market value, a representative depreciation
  figure is deducted from the previous number.

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Investment Strategy

• The Investment Method is a practical method of
  determining the market value of commercial
  properties.
• The property's market value is directly related
  to its income-generating potential.
• This method provides an accurate picture by
  converting income earned (both present and
  future) from the property into an approximate
  capital sum.
• The valuer in this case uses the discounted cash
  flow method, the future cash flows that the
  property owner will generate from the property.