METHODS OF ASSET VALUATION THE LATEST IN 2023

Valuation is an important job, a top priority for every real estate transaction decision. With good knowledge and accurate valuation information, property buyers or sellers will not be afraid of being forced by land brokers and avoid arbitrage.

The following are real estate valuation methods that can be consulted and applied by investors in Vietnam:

1. Direct comparison method

This method is based on the market price of properties that have many similar characteristics to the property under consideration, to estimate and determine the real value of the property.

The comparative method applies to all assets such as real estate, movable assets, tangible assets, intangible assets, financial assets, etc., which meet the requirements such as having high homogeneity, There are popular transactions in the market, and the market is stable.

This is the most widely used and popular method today in Vietnam as well as in many countries around the world.

2. Income method

This method is based on the average future annual net income from a property, corresponding to a certain rate (%) of return (also known as capitalization rate) to calculate the value of the property. of property.

The drawback of this method is that the parameters to calculate the real estate value require high accuracy, while their determination must be carried out under pre-planned conditions. Therefore, the accuracy of the calculation results is often limited. In case the test results have a large difference, other methods must be applied for additional calculations.

3. Cost method

This method is mainly applied to valuing properties that have no or very little sales on the market (church, school, hospital, office, etc.).

Based on the substitution principle, the cost method assumes that the value of an existing asset can be measured by the cost of producing a similar asset that acts as a substitute, i.e. the value of the replacement site plus current construction costs.

4. Profit method

This method is used to determine the price of special properties such as movie theaters, hotels, and others whose value is primarily dependent on the profitability of that property.

The drawback of this method is that it is only applicable to determining the value of properties whose operations generate profits.

5. Residual Method

This method is often applied to calculate the value of real estate not according to the current state of use, but based on the purpose they will be used in the future. For example, based on the planning will be approved by the competent authority.

In essence, a residual method is a form of the cost method. They follow the principle: the value of land is determined based on the residual value after deducting the total cost and profit from the value of real estate works.

6. Extraction method

This method determines the value of land use rights by subtracting the value of assets attached to land from the total value of the real estate (including the value of land use rights and the value of assets attached to land). )

The basis of the subtraction method is that it is possible to determine the value of a part of the remaining asset when the total value and the value of the other part are known.

The subtraction method is useful when valuing land parcels with assets attached to the land similar to those subject to valuation.

Above are some ways of valuing properties synthesized by SunValue. To know the exact value of the real estate, you should look to the valuation units with experience and expertise to accurately assess the market and price, so they will make accurate and quick judgments. best.

One of the leading prestigious appraisal units in Vietnam is Indochina International Appraisal & Investment Joint Stock Company (INA) - SunValue, operating with many years of experience in the field of valuation with a rich data warehouse. With a team of professional and highly qualified appraisal experts, the appraisal process is fast and rigorous, minimizing the cost of the appraisal, etc., providing comprehensive solutions for each appraisal purpose such as Proof of assets for study abroad, settlement, tourism, purchase and sale, transfer, equitization, joint venture capital contribution, compensation - clearance, civil dispute settlement, liquidation, asset sale, bank loans,...