Land Valuation and Methods of Land Valuation

What is Land Valuation?

Land valuation can be described as the procedure by which the appraisal of the land is ascertained. It is done according to the market value of that location and according to the standards of real estate tax of that area.

How is Land Valuation done?

Methods for appraisal of land are enormous and none of them comes without drawbacks. Whatever the routine misunderstanding prevails but it is also real that the kind of approach will change the value of your land.

Generally before applying any approach people check the Free market Value of that home which does not offer the real value of that land but offer a rough evaluation of land if to be cost that period of time. It is not a mathematical valuation but definitely offers you a rough appraisal which is near to the real one.

There are many approaches of estimation however the popular ones are:.

a) Equivalent Technique-- It is a procedure in which the appraisal of a land is done by comparing it with the assessment of exact same kind of land or home in the exact same location. Though it is the most usual one but as it is completely based upon the presumption and neglect the other elements such as condition of the land/property, if any other asset is offered with the land and so on. It mirrors the free market value and the real price may go reduced or high depending upon the circumstance.

b) Payment Method-- This approach is used by those who plan to pay the amount in long tenure based upon their income. Taxes, repair work cost, vacancy duration and other factors are likewise considered. After the tenure is completed the ownership shifts to the buyer and afterwards he/she could sell it.

The formula that is utilized here is, value of finished task= value of same task in present condition. Open market value is likewise essential right here in order to get residual value. Calculation of cost that is included in developing a land is a required factor for getting recurring value.

e) Expense Approach-- The calculation of particular land is done via base value that takes into consideration all the expense that is involved in structure. Base cost commonly provides a good mean determining all computation.

Land Valuation is an extremely vital phase before you choose to buy or offer any home and it should be done with appropriate care. For even more information on Land Valuation and our services, mail us on info@aarnarealty.com or call us on 91-9911661818.