The commercial real estate appraisal is considered as the
mixture of art and science. Before making any kind of decision related to real
estate value the knowledgeable and well experienced truck appraisal used to collect and analyze the information first.
In the appraisal profession you will come across various well established
analytical techniques – the cost approach, income approach and sales comparison
approach. It totally based on the characteristics of the subject property that
which approach has to be used.
If we talk about the cost approach then this is said to be
the most applicable approach in case of the commercial real estate appraisal,
as far as new properties and special use properties are concerned. If we
consider the older properties then in that case commercial real estate truck
appraisal do not make use of the cost approach and the main reason behind the
same is that it becomes complicated to accurately calculate the amount of depreciation.
Know the
different ways to perform the appraisal
Moving on to the next if we discuss about income approach
then one could consider it as appropriate for investment or income properties.
In this case truck appraisals used to collect the information about the actual
income and expenses for the subject property, expense comparables, industry
expense data, rental comparables, and market occupancy and rental market
trends, after collecting the information the commercial real estate truck
appraisal used to calculate the gross potential income, effective gross income,
other income, operating expenses and net operating income. Net operating income
is converted into an indication of market value by using the conversion factor
known as capitalization rate and using the following formula:
Market value = net operating income/capitalization rate.
This process is known as direct capitalization.
One can also calculate income approach by making use of the
discounted cash flow analysis. In this we mainly get to know that for how many
years more the building can be used and how much revenue it can generate in the
coming future.
Commercial property truck appraisal also makes use of the
sales comparison approach in order to estimate the market value. The sales
comparison approach is considered as good for the owner occupied properties.
Once the data is obtained about the similar properties that have been sold, the
truck appraisal is able to get the idea about the market value of the subjected
property.
After keeping in mind all the three approaches to appraisal
and preparing an analysis that which approach is considered to be relevant, the
truck appraisal bring together the
indication of value to decide the final value. Before reaching to the final
conclusion of deciding the value, the quality and quantity of all the
approaches are bring together.
In market the best company for
commercial appraisal is “Fidelity Appraisal”.
