TOP 3 approaches to real estate valuation 2020

The real estate valuation helps businesses have appropriate business plans and bring high profits. Its important to understand real estate valuation approaches, so you can compare the prices of similar properties to buy or sell your property with the best value.

APPROACHES FOR REAL ESTATE PRICE APPRAISAL

When appraising real estate prices or any type of property, whether on a market or non-market basis. This requires the appraiser to apply one or more valuation approaches.

Valuations based on non-market value may apply similar approaches to valuation on the basis of market value. But there are other purposes for determining estimated prices at market value. In todays valuation operations there are three basic approaches:

Approach to selling price

+ Basis of market value: The price comparison approach considers the transactions of similar or replacement assets and market data, to determine the estimated value by related comparisons. The valuation property is compared with similar properties that have just been transferred in the market.

+ Non-market value basis: This approach is shown by the fact that property owners can pay a higher price for an adjacent property. When applying the transaction comparison method to estimate the maximum price that the owner pays for adjacent properties. The price that must exceed the market value must be achieved and this estimated price is called the special buyer value.

Cost approach

+ Basis of market value: This approach only considers the ability to create the value of a real estate in reality. Instead of buying a certain asset on the market, one can build or build another property similar to the original one. The buyer will not pay for an asset more than the cost of obtaining the corresponding property, unless due to time conditions or inconvenience and other risks.

+ Non-market value basis: This approach focuses on individual assets and may not have market costs. The discounted replacement cost is used in assessing the value of specialized assets for financial reporting purposes, when market evidence is limited and not available.

Income approach

+ Basis of market value: This approach examines data on income and expenses related to appraised assets and estimates value through capitalization process. Capitalization related to income and the value of assets is calculated by converting net income into an estimated value. This process, called income capitalization, is directly related to income and the discount rate.

+ Non-market value basis: An investor may apply a non-market rate of return and only that investor. When applying an income capitalization approach to estimating the price, an investor pays for a specific investment based on the investors expected rate of return. Appraisers must estimate the value of investment or property value rather than market value.

ADDRESS EVALUATION OF EVERY ENTERPRISE

Indochina International Investment & Appraisal Joint Stock Company (INA) is a unit operating for many years in the appraisal industry, selected and trusted by customers. We have a team of qualified examiners who are professional, experienced and dedicated. Therefore always ensure to provide customers with accurate information, real value, real assets with high reliability.

Helping customers business activities become more convenient and have good investment opportunities, to develop the brand more effectively. If you have a need to learn about valuation, immigration investment advice ... contact us immediately for advice, guidance and evaluation by the most appropriate method.

Indochina International Investment & Appraisal Joint Stock Company (INA)

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