What Is Meant By Valuation Of Immovable Property?

The process of determining an immovable property's market worth or price is known as valuation of immovable property. All elements of valuation of immovable properties like market variables and pertinent property characteristics are taken into account when determining the valuation.

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Landed property is what makes up the movable property and is categorised as follows:

• Residential: Homes, apartments, and tenements

• Commercial: Establishments, stores, and offices

• Industrial: Storehouses, factories, and godowns

• Land: used for farming

When we refer to the valuation of immovable property, we imply determining its market value. It is done for a variety of purposes, including;

• for the purpose of purchasing and selling of real estate.

• in order to file taxes.

• for the property's transfer, the value of the immovable property is determined.

• to mortgage a piece of property.

• for compelled purchases.

• in order to raise money for a loan on real estate.

While the land is an immovable property, it can also be divided into smaller parts to make appraisal easier.

Examples of landed property include

• Agricultural land

• Flats

• Residential land

• Various types of houses

• Tenements

• Offices

• Commercial land

• Industrial land

• Factories or industries

• Shops and establishments

• Storehouses

• Warehouses

After understanding, what is meant by valuation of immovable property, let us focus on the process of calculating the immovable property valuation:

For the valuation of immovable property, various techniques can be utilised. These techniques include the,

• Investment Method:

for the Valuation of Immovable Property. With this technique, the possibility of a return on investments is taken into account.

• Contractor Method:

also known as the Capital Value Method. The contractor's technique typically accounts for the estimated value of the land that is already in use, the estimated value of the building's construction costs, and the depreciation costs when calculating the capital value. This method of valuation is typically applied to evaluate properties that cannot be sold or are not intended for sale. These are divided into three different categories, namely:

1. Properties with public utility facilities, such as train stations, power plants, water treatment facilities, etc.

2. Schools, colleges, museums, and other public spaces

3. Properties with the potential to be profitable, such as theatres, concert halls, stadiums, etc.

• Comparative Method:

As the name implies, this method of valuing real estate is done by comparing the costs of comparable properties that have sold within the location or region three to five years prior to the date of value. When providing a valuation service, factors including location, amenities, size, circumstance, user, and age of the property are taken into account.

• Residual Method: 

To determine the worth of immovable property, this method uses latent value or the potential for development.

• Profits or Accounts Method: 

This method takes into account the immovable property's overall profits while determining its value.

I would like to conclude here about the elements of valuation of immovable properties. I hope this helps:)

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