Property valuation in Brisbane can either be expensive or cost next to nothing. The key difference is in the quality of the estimates you need, the type of property, and what you need the information for. If you need property valuation as part of business valuation Brisbane, you need to work with professionals who may charge you some thousands of dollars for the professional services rendered.
Property valuers may charge anywhere between $3,000 and an upward of $20,000 depending on a range of factors, including the property's location, estimated value, local market status, total property area, and renovations done on the property.
While you may certainly draw up a formula for your property or business valuation needs, the final estimate may not consider some relevant factors like socio-economic effect, population effect, and others. Before estimating the property valuation cost, you need to understand a few things.
What Is a Property Valuation?
Property valuation is a process that prospects or aims to estimate a property's economic value. Property valuation becomes necessary for several reasons, especially when making a sale, using it as collateral against a loan, when it’s involved in a divorce, or when making financial decisions. The closer the estimate to the current value of your property, the better.
While property valuation is a great way to estimate a property's worth, you should also know that the value fluctuates. Fluctuations in property value are caused by factors like;
Demand
In a perfect market, the forces of demand affect the price and value of goods and services. In real estate terms, the higher the demand for properties, the higher the prices. With increased competition for properties, buyers are willing to pay more to secure the scarcely available properties, thus making properties cost more.
Utility
Utility is the satisfaction a future owner expects to get from owning a property. Buyers who expect a high level of utility are more likely to pay higher, thus causing the property's value to jump. On the other hand, buyers who do not expect much utility from the purchase may be unwilling to spend more to claim it.
Scarcity
Scarcity is also as important as demand. When suitable properties are scarce on the market, the prices tend to jump up. This means that although the demand may not be high, the low level of availability makes it command more.
What Properties Can Be Valued?
Property valuation is a broad term that encompasses some important subclasses of properties and assets. Most professional property valuers can estimate the value of lands and residential, commercial, public, rental, government and educational buildings, among others.
Essentially, property valuers deal with real estate properties of any kind. Their goal is to estimate the current value and future projections on the property's value.
How Do Property Valuers Work?
Professional property valuers have a set of approaches to estimating any property's cost and value. They visit the property site to gather relevant information and leverage their experience and expertise to draw up an estimate. Many professional valuers rely on valuation tools and experience to arrive at the nearest estimates.
Some of the common methods of valuing property are;
Sales Comparison Approach
The sales comparison or market data approach is commonly used for lands and single-family homes. This method estimates the property value by comparing it with market data of recently sold and similar properties. For similar properties or comparables to be used as benchmarks, the property must;
- Be as similar as possible to the property that's being valued
- Have sold within the last 12 months in an open and competitive market
- Have been sold under typical and familiar market conditions.
When selecting a comparable, some of the important qualities to look for include;
- The age and condition of the property
- Date of sale and economic condition around the sale
- Terms and conditions of the sale
- Property location. This is especially important as location is a huge factor affecting property costs.
- Physical features and amenities.
Cost Approach
This is used to estimate the value of a property that has been improved upon since its purchase. This means that properties that have undergone remodeling or renovations aren't worth the same as when purchased. This method considers the separate value of each constituent, like land, renovation/remodeling, building, and others. The estimates are calculated individually and added up to arrive at a close value for the property.
The cost approach also takes depreciation into account. This method considers the amount an average buyer may be willing to spend on the property acquisition too. With regards to depreciation, some of the important aspects considered include;
The physical state and deterioration of the property: It also considers whether the deterioration can be fixed or whether it is permanent. For example, a painting problem can be fixed at a cheaper cost than a foundation problem.
Functionality: This considers whether the property is outdated and may need to be improved to match the current modern standards. The cost of improvement may also be taken into account when calculating property value.
Economic Value: The economic value of a property can either increase or decrease based on external factors surrounding it. For example, properties located in flood-prone areas may be worth less compared to those located around the central business districts.
Can I Do Property Valuation Myself?
Yes. You can value your property as an independent owner. However, there is a chance that you may be biased with the valuation of your property. Your report may also be inadmissible for official purposes like loan collateral, business acquisitions and mergers, etc. It is recommended that you hire professional business valuers to handle your needs when the time arises.
What is a Property Valuation Report?
A property valuation report is a document that is provided by the professional property valuer stating the estimated current and future value of your property. The property valuer, in the report, will state the worth of your property and may provide further information as to factors that have affected the property's worth.
When looking to value your property, the chances of getting the right numbers rests on how professional your property valuers are. Visit https://www.businessvaluationbrisbane.com.au to contact experienced property valuers or learn more about property valuation.