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 property 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 simultaneously. According to the Real Estate Valuation Act, this may be necessary in order to take into account all circumstances that determine the value of the property.

THE COMPARATIVE VALUE METHOD

In a comparative valuation process, the value of the property is determined by comparing the purchase prices of similar properties. An average price is calculated from the pool of comparable objects. The more comparable prices included in this calculation, the more accurate the estimate is. Factors such as the age of the property, energy consumption, or amenities are incorporated into the result through adjustments. This method is used, for example, for used apartments, building plots, or terraced houses.

THE VALUABLE ASSET 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, age-related wear and tear, location, construction costs, etc. are also included in the calculation. The appraised value method is applied, for example, in new construction projects or single and two-family houses.

THE INCOME APPROACH

In the income capitalization method, the value of the property is determined by capitalizing the net income generated by this property. This method is primarily used for rental properties, such as multi-family homes or commercial buildings and office properties, as well as investment properties. Capital investors are interested not only in location, amenities, etc., but also, and especially, in how much income they can generate from this property.

CRITERIA FOR VALUATION

In addition to these three methods, there are also other criteria that must be considered when evaluating a property. In order to determine the actual value as accurately as possible, both the characteristics of the property, such as location, year of construction, usable and living space, fixtures and condition, as well as the energy certificate, and legal factors, such as special usage rights and the level of the repair reserve, must be taken into account. These criteria have different weights relative to each other. For example, a house with a larger living space may be cheaper than a small house – and that is only due to the location.

In principle, the interplay of all these relevant criteria is crucial for property valuation. A professional and experienced property appraiser takes all these factors into account to ultimately determine the value as accurately and precisely as possible. Because a correctly 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 be there for you and provide you with detailed advice on all topics related to the sale of real estate and its valuation.