There are different ways to figure out how much a property is worth. Let’s look at some common ones:
1. Sales Comparison Approach: With this method, the valuer looks at recent sale prices of similar properties (same area, location, age, bedrooms, etc.). These sale prices help set a reference price for the property being valued.
2. Cost Approach: When there are no similar properties, this method comes in handy. Here, the price is calculated based on the current cost of buying land and building a similar property in that area.
3. Discounted Value of Property Rentals: This method estimates the property’s future rent. Experts analyze the demand and supply in the area to figure out the future rent, which then helps determine the property’s value.