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 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 Real Estate Assessment 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 pool of comparable objects. The more comparison prices that are included in this calculation, the more accurate the estimate. The age of the property, energy consumption, or the equipment are factored into the result through surcharges and discounts. This method is applied, for example, to used apartments, building plots, or terraced houses.

THE ASSET 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. Here, too, age-related wear and tear, location, construction costs, etc., are taken into account in the calculation. The cost approach is applied, for example, in new construction projects or single and two-family homes.

THE INCOME APPROACH

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

CRITERIA FOR DETERMINING VALUE

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 area, fittings, and condition, as well as legal factors such as special usage rights and the amount of the repair fund must be considered. These criteria have varying weights in relation to each other. For example, a house with a larger living area can be cheaper than a small house – and this can be solely due to the location.

Basically, 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. After all, an accurately determined property value not only accelerates the sale but also achieves the best possible price for the seller.

AKKADIA VALUES 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.