Assessing the value of a building, regardless of whether it is an apartment building or industrial complex is not easy at all. Commercial appraisals specifically tend to be a lot more subjective compared to residential reviews. This is because commercial values also depend on uncontrollable elements like the market prices for rent, maintenance costs, etc. Not just that, there is also a question of how much the buyer of yours agreeing to pay. Keeping all of these confusions in mind, it is essential that we take a look at the best real estate valuation methods for all commercial properties.
Cost Approach
Valuation methods usually consider the expenses required to rebuild structures from scratch. This takes into consideration the present value of the land along with the construction material with other costs that are also associated with the existing structure & replacement. The approach is usually applied when you have appropriate comparables that are hard to locate. The cost approach is usually applied when the comparables are hard to locate, like property contains also unique as well as specialized improvements, or whenever the structures have value towards the underlying land.
Sales Comparison
Best regarded as a market approach, this method also depends heavily on sales data for properties. When a buyer has sold buildings and properties of the same nature in the same area, chances are that he will be able to ascertain the best market value for the property that is in question. For example, a 12-unit building that has recently been sold can also be compared to other buildings which have been sold within the same neighborhood within a couple of months earlier.
Value Per Door
Using a commercial real estate method is specifically used for all the apartment buildings instead of the single structures. The method has been to determine the worth of a building based on the number of units. If a building has been priced at 4 million for 20 apartments, it is natural that per door will cost you approximately 200 thousand dollars for every door.
Cost Per Foot
Another factor you need to look into is the cost per foot. Rentable square foot usually combines the square footage that is usable and some common areas that most tenants benefit from. By using this methodology you will easily be able to extrapolate the cost for every rentable square foot and then compare it with the average lease for every square foot and make the valuation of the building in an easy manner.
In the end, every buyer will value property in a different manner. The valuation of such property does provide a subjective as well as unscientific component. Even the best real estate experts have gone with their instincts when it came to finding the best deals. Hence, it is important that you look for the commercial property valuation with McLean Gladstone Valuers who happen to be the best in the business and have years of knowledge and experience that can help you out in all matters related to pro