HOW MUCH IS YOUR PROPERTY WORTH?

WHAT PROCEDURES ARE THERE?

For the calculation of a property's value, there are three possible valuation methods: the comparative value method, the cost approach, and the income approach. The method employed for the valuation depends on the property being assessed. However, it is also possible to apply multiple valuation methods simultaneously. According to the Property Valuation Act, this may be necessary to consider all circumstances that determine the property's value.

THE COMPARATIVE METHOD

In a comparative valuation procedure, 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 rule is: the more comparison prices are included in this calculation, the more accurate the estimate. The age of the property, the energy consumption, or the amenities are factored into the result through surcharges and discounts. This method is applied, for example, to used apartments, building plots, or terraced houses.

THE TANGIBLE ASSET PROCEDURE

In this method, the land and construction value as well as the values of other components of the property are determined. This may also include the furnishings or equipment of the property. Here, too, factors such as age-related wear and tear, location, construction costs, etc., are included in the calculation. The cost approach is applied, for example, in new construction projects or single and two-family homes.

THE INCOME APPROACH

In the income approach, the value of the property is determined by capitalizing the net income generated by the object. This method is primarily used for rental properties, such as multi-family houses or commercially used buildings and office properties, as well as rental houses. Investors are not only interested 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 also additional criteria that must be taken into account 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, fittings 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 varying weights relative to each other. For example, a house with a larger living area may be cheaper than a small house – and that just because of the location.

Basically, the interplay of all these relevant criteria is crucial for property valuation. A professional and experienced real estate appraiser considers all these factors 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.