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 material value method, and the income value method. Which of these methods is used for the valuation depends on the property to be valued. However, it is also possible to apply several 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 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 inventory of comparable objects. The more comparison prices that are included in this calculation, the more accurate the estimate is. Factors such as the age of the property, energy consumption, or the fittings are included in the result through surcharges and discounts. This procedure is applied, for example, to used apartments, building plots, or terraced houses.

THE SUBSTANCE VALUE PROCEDURE

This method determines the land and construction value as well as the values of other components of the property. This may also include the accessories or fittings of the object. Again, age-related wear and tear, location, construction costs, etc., are taken into account in the calculation. The asset value method is applied, for example, in new construction projects or single-family and two-family homes.

THE INCOME APPROACH

The income value method determines the value of the property by capitalizing the net income generated by this object. This method is mainly used for rental properties, such as multi-family houses or commercially used buildings and office properties, as well as income properties. Investors are not only interested in the location, equipment, etc., but also, and especially, in how much they can generate with this property.

CRITERIA FOR DETERMINING VALUE

In addition to these three methods, there are also other criteria that must be considered in the evaluation 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, features and condition, as well as the energy certificate, and legal factors like special usage rights and the amount of the repair reserve must be taken into account. These criteria have varying weights in relation to each other. For example, a larger house may be cheaper than a small house, and that might only be due to the location.

The interplay of all these relevant criteria is fundamentally 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. This is 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 from AKKADIA are happy to assist you and provide detailed advice on all topics related to the sale of real estate and its valuation.