Property Valuation and its implication on Investors
Posted: Jan 13, 2015
Real estate tends to be the most profitable and fruitful business sector. Even after the world economic crises 2008 the sector suffered a lot. Real estate has a wide opportunity of earning and growth. Different countries in the world evidenced themselves as a heaven for the real estate investors. Australia is one of them, as it is the land of opportunities for real estate business and its affiliated businesses.
Perth can be described as one of the most astonishing places in the world which can easily be considered safe for investment perspective. Real estate sector of Perth is a jackpot for investors and entrepreneurs. But an investor does not make decision of sale and purchase of property on the basis of good remarks heard for the place. They need a complete valuation and investment appraisal report that must be produced before entering into investment contract. Business Valuation Perth used to provide the valuation that helps them to establish investment decision basis on the valuation provided by the valuer.
Business Valuation is an emerging business activity that helps the investor to make right decisions regarding the property. The first thing to notice is that the valuation needs to be accurate because the decision of another person used to rely on the working of the valuer. Secondly, the investor must know that the business valuer possesses relevant capacity, competence and experience regarding the field. As if the qualified and experienced valuer provides estimates then there would be bright chances that the valuation would not go wrong. Thirdly, the valuer must make valuations on time and must not supply valuation that surpasses from their deadline. Valuer must also closely examine this factor that for whom he is going to make valuation estimates, whether it is for individual or any business. Because the type of client must be closely monitored. Well, usually the corporate needs more accurate valuation because commercial property involves gigantic finance.
A lot of techniques can be used to perform property valuation. Some of them are written below:
Cost Based Valuation:
Under cost based valuation, property used to be valued at its original cost that means the cost on which it is purchased. It is usually due to lack of active market of the similar type of property and too distinct features in any property that makes other models irrelevant to be applied.
Market Based Valuation:
Under Market based valuation the respective property is valued on the basis of the value of other properties in the area. The valuer used to follow recent sales purchase transactions of the properties in the area and then supply estimates of the property.
Profit Based Valuation:
This approach is taken for properties that have earning potential and its value not only include the asset value but also the profit earning capacity. These types of properties are usually more costly than other properties. This approach is applied for Hotels and agricultural land valuations.
In conclusion, it can be easily said that Property valuation is not any easy task and involves specialist knowledge and skills.
A highly motivated and results driven financial sector professional who has near seven years of experience in finance. Financial analysis and reporting, forecasting, planning and analysis, statistical & financial analysis, budget & variance forecasti