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 cost approach, and the income approach. Which of these methods is applied in the valuation depends on the property being evaluated. However, it is also possible to apply several valuation methods at the same time. According to the Property Valuation Law, this may be necessary in order to take into account all circumstances that determine the value of the property.

THE COMPARATIVE METHOD

In a comparative procedure, the value of the property is determined by comparing the purchase prices of similar properties. From the pool of comparable objects, an average price is calculated. It holds that the more comparison prices that are included in this calculation, the more accurate the estimation is. The age of the property, energy consumption, or the features are taken into account through adjustments in the result. This method is applied, for example, to used apartments, building plots, or townhouses.

THE VALUABLE ASSET PROCEDURE

In this process, the land and building value as well as the values of other components of the property are determined. This may include accessories or the furnishings of the object. Here, too, wear and tear due to age, location, construction costs, etc., are taken into account in the calculation. The cost approach is used, for example, in new construction projects or single and two-family houses.

THE INCOME VALUATION METHOD

The income valuation method determines the value of the property by capitalizing the net income generated by the property. This method is primarily used for rental properties, such as multi-family houses or commercially used buildings and office properties, but also for rental houses. Capital investors are interested not only in location, amenities, etc., but also, above all, in how much they can earn with this property.

CRITERIA FOR VALUE DETERMINATION

In addition to these three methods, there are also other 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, equipment 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 weights in relation to each other. For example, a house with a larger living area may be cheaper than a small house – and this is solely due to the location.

Essentially, the interplay of all these relevant criteria is crucial for property valuation. A professional and experienced real estate 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 assist you and provide you with detailed advice on all topics related to the sale of real estate and their valuation.