Real estate investment involves a proper survey of the buyers to acknowledge the legitimate market value of the property prior to the investment. Execution of conventional research assists more acceptable discernment and acquire secondary outlook from another party for the prudence of fair value in market unaccompanied by any form of partiality. The important factors like location, infrastructure, transportation facilities and basic amenities add up to the value of the property in a particular region. With the rapid development and growth in Real estate market, appropriate dealing of the property assists in the valuable purchase of the real estate.
Factors affecting property valuation
Location and amenities
Property valuation highly depends on the locality of the property, the urban areas (market and commercial areas) will hold on to a higher value as compared to the suburban areas. One aspect for the higher value of the market or commercial areas is that it provides the modern amenities more relatively and adds to the higher cost whereas the areas failing in this aspect holds comparatively less value of the property.
Safety and Security
This is one of the major factors influencing cost to add up in the value of the property. Safety and security are prior to any amenities provided in the locality of the property. Areas less prone to criminal activities are more demanding in the market offering a higher value of the property.
Infrastructural development
The development of infrastructure is an important component of the evaluation of the property. Areas which are high in the process of development eventually upgrade the value of the property rather than the areas failing in these terms. Transportation facilities, roads, sewage, water connection and electric system availability are included in the infrastructure of the particular area.
Supply and Demand
Demand and supply for the real estate are reciprocal in terms of population and the availability of property in a particular area which eventually upgrade or degrade the valuation of the property. The Population of the area plays the key role in the evaluation of the property.
Connectivity
The areas acquiring connectivity attracts more investors in the real estate of the particular area. Connectivity in terms of health and medical facilities, educational institutions, markets, the center for business, entertainment points and other regular facilities engage more investors and thus adds to the value of the property.
Estimating the value of property
There are various methods to evaluate the real state depending on its selling, buying or construction. The most common methods for the valuation of property are given below:
- Comparative method
- Residual method
- Contractors method
- Investment method
- Profit method
- Cost method/ Base method.
The most common method for the estimation of the value of the property is done by measuring the Plinth area.The basic ways to evaluate the property are:
. Calculation of the market value – Choose the apt circle rate ubiquitous in the particular location of the real estate and find the net worth by calculating the total area of the property.
. Property Valuator – Property valuator approved by the government provide the appropriate financial status of the property by checking all the aspects of the property ( including the locality, area, structure, etc.) and furnishing the correct figure for the property which can be finalized.
. A rough estimation of the net worth of the property can be obtained by researching online to get the fair price of the property in the same zone.
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