HOW MUCH IS YOUR PROPERTY WORTH?

WHAT PROCEDURES ARE THERE?

For the calculation of the value of a property, there are three possible valuation methods: the comparative value method, the asset value method, and the income value method. Which of these methods is applied in the valuation depends on the property to be valued. However, it is also possible to apply multiple valuation methods at the same time. According to the Property Valuation Act, this may be necessary to take into account all circumstances that determine the value of the property.

THE COMPARABLE METHOD

In a comparative procedure, the value of the property is determined by comparing the purchase prices of similar properties. An average price is calculated from the inventory of comparable objects. The more comparison prices are included in this calculation, the more accurate the estimate is. The age of the property, energy consumption, or features, for example, are incorporated into the result through additions and deductions. This method is applied, for example, to used apartments, building plots, or terraced houses.

THE ACTUAL VALUE PROCEDURE

In this procedure, the land and construction value as well as the value of other components of the property are determined. This may also include the accessories or furnishings of the object. Here, the age-related wear and tear, location, construction costs, etc. are also factored into the calculation. The comparative value method is applied, for example, in new construction projects or single-family and two-family houses.

THE INCOME VALUE METHOD

In the income approach, the value of the property is determined by capitalizing the net income generated by that property. This method is primarily used for rental properties, such as apartment buildings or commercially used buildings and office properties, as well as investment properties. Investors here are interested not only in location, features, etc., but especially in how much they can earn with this property.

CRITERIA FOR VALUE DETERMINATION

In addition to these three methods, there are other criteria that must also be taken into account in the assessment of a property. In order to determine the actual value as precisely as possible, both the characteristics of the property, such as location, year of construction, usable and living space, amenities, and condition, as well as the energy certificate and legal factors, such as special usage rights and the amount of the repair reserve, must be considered. These criteria have different levels of weighting in relation to each other. For example, a house with a larger living space may be cheaper than a smaller house – and that could be solely due to the location.

The interplay of all these relevant criteria is crucial for property valuation. A professional and experienced property appraiser takes all these factors into account in order to ultimately determine the value as accurately and precisely as possible. Because a properly determined property value not only accelerates the transaction but also achieves the best possible price for the seller.

AKKADIA EVALUATES YOUR PROPERTY

We at AKKADIA are happy to assist you and provide you with comprehensive advice on all topics related to the sale of real estate and its valuation.