Valuation of a Residential Building in Auckland

Purchasing real estate is not like purchasing electronics, groceries, or other services and goods. Properties do not have any fixed price tag and for that matter, they do not have a fixed value such as stocks.

Their value constantly changes based on what the buyer is willing to pay. Do you know how much your property is worth? Let property valuation Auckland help you find out the importance of it in terms of area, value and price.

Preparing a residential property valuation can make the whole process easier for the valuer and yourself. Here are some of the useful property valuation Auckland tips to help you ready for valuation.

1) Know your area and its potential:

2) Be realistic and honest:

3) Tidy:

4) Access:

5) Wait for the valuation:

1) Know your area and its potential:- First off let the valuer know the recent sales figures for the properties. You have to collect evidence of it such as real estate agents, brochures, and contact details. Valuers have access to the sale date and if they are one month older, very recent sales come in handy to identify.

2) Be realistic and honest:- Always be honest and realistic with the value and yourself. A certified valuer can determine the value of the property. So, there is no point in exaggerating. A valuer’s job is to assess your residential property’s value based on the sales and market to provide a fair value proposition.

Read More:- Auckland Property Valuation Methods

3) Tidy:- Just like you are having a guest over, the same goes for a property valuation Auckland. It does not hurt to repair, declutter, tidy, and complete the half-done renovations. Valuers can see beyond just a little dust.

But a well-presented property is smoother to assess and puts the property in the best possible situation. Preparing the home for valuation can be helpful and create a positive first impression to show your property’s potential.

4) Access:- A valuer will require access to every room in the residential property but you can speed up the process by giving him the access option. They will measure the property as well. You have to provide documentation including plans of a building, pre-contract disclosure statement, and account details. This will help with the full valuation of your property.

5) Wait for the valuation:- A valuer can’t simply tell you the value of your residential property instantly, they have to do their research, compare the property sale figures, and make assessments. The great thing you can do is to prepare your property valuation Auckland and show it at its best.

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Auckland Property Valuation Methods

 Today we will discuss the various property valuation methods in regards to house valuation Auckland. There are five main methods that can be used for conducting property valuation.

A property valuer or an appraisal service provider might use one or multiple methods of the five in order to calculate the value of a property rather accurately.

The 5 main methods to conduct property valuation are:

• The Comparison Method
• The Profits Method
• The Residual Method
• The Contractor's Method
• The Investment Method

The Comparison Method

The most prominent and preferred of the five property valuation methods for house appraisal Auckland is the comparison method. This method is used to evaluate the common kinds of properties, like houses, shops, office places, and standard warehouses. The market should be stable and comparable for an accurate evaluation.

The Profits Method

The profits method is used when there are no comparable rental or sale transactions of a property in the area. The profits method deducts all working expenses(excluding rental payments) from the estimated gross profit of a business; this gives a divisible balance. This method is mostly used for pubs, hotels, nursing homes.

The Residual Method

The value of a property with development potential or vacant land is often calculated by the residual method. Land value is calculated by subtracting the cost of development from the gross development value. 

This method has been declared inaccurate and is no longer commonly used because of the high number of variables that are involved in this method.

The Contractor's Method

This method is a cost method that can be used for valuation when comparative profits and the investment method of property valuation cannot be used. Because of its unreliability, this method is also called the method of last resort. 

This method determines the value of a property based on the cost of production and not on the basis of demand and supply.

The Investment Method

This method is used to evaluate the market value of a leasehold or a freehold interest of the land or property from its future income potential. This method is typically used for rental properties, where a tenant is paying the landlord with an interest to his capital investment. 

The method first finds the revenue then applies the profit to future rental income(discounted back to present). This gives the net present value(NPV) of a property. NPV indicates the current worth of a property.

We hope the details mentioned above regarding the five main property valuation methods will prove to be informative and insightful to our readers.

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