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Independent & Accurate Property Valuations

Methods of Commercial Real Estate Valuation

The commercial property valuation can be done with some comparison and calculation methods. The professional valuation companies can help the investors to calculate the right value of the property.

The commercial real estate valuation is very important for the investors who are interested in the commercial plots. The real estate business is in a blooming stage, and so the competition is quite high among different plots. This is where the process of valuation comes in. With the commercial real estate valuation processes, you can have the idea how much a property should cost. You can them make investment decisions accordingly.

When you are buying a commercial property, or selling it, there are a lot of things that you need to consider about. More than selling, buying the plot is overwhelming. That can be a really big investment, and you have to be absolutely sure that you are putting your money in the right place. There are a lot of things to consider before being absolutely sure about a certain plot. The professional valuation services offers you in depth information about the real estate plot. That can surely help you to decide whether to invest in the commercial plot of your choice or not. There are different valuation methods that are used by the valuation services.

Property valuations

Cost Approach Method:

The most important part of a commercial property valuation is the understanding the growth possibilities of the plot. You also have to be hundred percent sure that the location of the plot will provide you with an advantage over other businesses. There are certain methods that can be used to evaluate the plot. One of them is the cost approach method. This method is not very common, but some of the best valuation services use it for an in-depth valuation. For this, they match the price of the property with the expenses of property constructions. However, the valuation company must have the knowledge of the construction costs of applying this method.

Sales Approach or Market Comparison Method:

This comparison method is most commonly used and trusted method for commercial property valuation. For this method to work, the valuation company finds another plot in the same sector with similar kind of characteristics as the targeted plot. This provides you with a clear idea about how much the commercial plot should cost, and you can decide your next step accordingly. When the lower value is considered as an advantage, the higher value opens the chance for negotiation.


Income Capitalisation Approach:

This is another method which is popular among the commercial real estate plot buyers who want to utilise the property for income. The possible income from the property compared to other properties, having the same characteristics. With this method the investor can understand if the property can provide them with the right returns with respect to their investment. The commercial real estate valuation companies have their market research done so that they can provide you with ready-made data for comparison.

Get your residential or commercial property evaluated by the award winning National Property Valuers at affordable cost. Contact our expert property valuers for any services regarding the property valuation in Australia.


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This entry was posted on April 1, 2013 by in Property Valuation and tagged .
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