Valuation Of Your Property
Valuation is a Process of estimating the value of the property. There are various methods available to calculate the value of the property. Property valuation depends on the location of the property, the quality of construction, maintenance of the property, proximity to major infrastructure developments and more. Safety and security is another factor which is closely looked upon in the present times.
Methods to calculate the value of the property:
1) Comparable sales method:
In this method, the valuation of property is determined by examining nearby properties. This method is most commonly used in case of residential properties. The nearby properties having the same average rate per unit area which are sold are first found. It is then multiplied by the actual area of the current property. Any specific defects in the property or advantages are also taken into account.
2) Cost approach:
This method determines the replacement value of the property. This value is determined by considering the cost of its components.
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3) The Residual Method:
This method is used when a property has the potential for development or redevelopment. Residual valuations for the property are regularly made by people who purchase residential properties that they believe could be made more valuable if money were spent on improvements and modernization. This method is generally applicable to development projects.
4) Automated valuations:
Automated valuations are instant and cost effective, and are generated, computer models. Automated valuation models use historical data that is indexed to predict current house prices.
5) Income approach:
It focuses on the value of the property rather than comparatives. Here, the present worth of property is estimated on the grounds of projected future net income like the rent and resale value. This method can measure a property's value based on the property's ability to generate and maintain revenue.
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