Commercial property valuation is an important process, as it helps property owners to know the market value or worth of their property at that given time. Also known as appraisal, valuation has to be done by a professional who is trained and knowledgeable on things to consider before coming up with a final valuation report. Below are 5 of the best and commonest ways to value your commercial property;
- Net worth; finding out the net worth of the commercial property is one way of arriving at its accurate value. The net worth means the difference between the assets owned, minus the liabilities, which are the things owed by the property to the bank or other entities. When calculating the assets, you don’t just count the touchable assets like buildings or houses; you also include the intellectual property, goodwill, as well the workforce employed around the property.
- Location; the location of your commercial property can also guide an appraiser. By checking or comparing what other similar property located in the same vicinity is going for, one can have an idea of how much their property is worth.
- Annual net profit; calculating he annual income or net profit generated by the commercial property is also a great way to estimate its worth.
- Prospects for growth; are there chances or prospects of growth and development in the vicinity where your property is located? Such aspects will also determine the appraisal report of your commercial property. If the area is undergoing rampant growth and infrastructural development, then your property will be valued for more.
- Surrounding market trends; another common technique of establishing the value of commercial property is by checking the current market trends. In other words, is the area experiencing an explosive settlement of people in search of commercial property, or are the people migrating to other better locations? How much is similar property going for in your neighborhood?
These 5 techniques form the foundation upon which many commercial property valuers derive their final reports from.