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 for the valuation depends on the property being 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 in order to take into account all the circumstances that determine the value of the property.

THE COMPARATIVE VALUE 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 stock of comparable objects. The principle is that the more comparative prices are included in this calculation, the more accurate the estimate. Factors such as the age of the property, energy consumption, or the level of amenities are incorporated into the result through surcharges and deductions. This procedure is applied, for example, to used apartments, building plots, or terraced houses.

THE TANGIBLE ASSET PROCEDURE

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

THE INCOME VALUE METHOD

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

CRITERIA FOR DETERMINING VALUE

In addition to these three methods, there are also other criteria that must be included in the evaluation of 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, features, 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 taken into account. These criteria have varying weights relative to one another. For example, a house with a larger living area can be cheaper than a small house – and that is solely due to the location.

Basically, the interplay of all these relevant criteria is crucial for property appraisal. A professional and experienced property evaluator takes all these factors into account in order to determine the value as accurately and precisely as possible. After all, a correctly determined property value not only accelerates the sale but also achieves the best possible price for the seller.

AKKADIA EVALUATES YOUR PROPERTY

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