What Is a house valuation or Property Valuation?
Whether you are a buyer, seller, or investor, determining a house valuation is important to understand the potential returns on your property you may expect in the future. The property valuation involves several factors to be considered for determining the worth of the property, such as location, age of the property, sustainability of the property, amenities, accessibility, and others.
There are times when only the location influences the property valuation report. You must have come across such instances where locations that are far from the city offer spacious apartments and a sizeable area of land at a lesser price, whereas properties located in the heart of the city cost a significant amount and offer a lesser carpet area or plot area. Mumbai could be the best example: as you go towards the south of Mumbai, the price of property increases and the usage area reduces, while it is vice versa in the suburbs.
Therefore, property valuation plays a crucial role in the real estate industry. In India, a variety of valuation methods are used to determine the value of real estate assets. This article is an attempt to make you understand the various land valuation techniques employed in India that assist you in navigating the complexities of the market.
Methods of Property Valuation
There are various house valuation methods used in India to determine the worth of a property. In case you are planning to buy, sell, invest, or simply want to get your property valuation done, your expert will use one of the methods below to determine the market value of land or an apartment.
The comparison method is one of the most commonly used methods for home valuation. This method is usually used when you are buying a property with the intention of staying there. Here, the evaluator considers the region and the recently sold properties to compare with your apartment or plot to determine the market value of the land or apartment.
This method estimates the property’s value by considering the cost required to replace or reproduce it. In order to assess the property, evaluators analyse the average cost of buying a plot and the building cost in a similar area to use it as a benchmark for home valuation through a cost approach. This approach is appropriate for newly built properties with a special characteristic that enables the evaluator to conduct a direct comparison.
As the name suggests, this approach is used to value commercial properties, including shopping malls and office spaces. Therefore, if you want to buy, rent, or lease a commercial property for your business, then you must go for this method, where the evaluator assesses the property value based on the current market rent, vacancy rates, operating costs, and capitalization rates. This approach is based on the idea that a property's worth is directly correlated with its ability to generate income.
This approach is taken by an evaluator when the property is bought with the intention of increasing its value by renovating or altering it. Here, the evaluator considers the size of the plot or land, location, permissible floor area ratio, accessibility, etc. to estimate the property value, which includes potential developmental chances, zoning laws, and the market for the desired use. It is perfect for assessing land for projects involving residential or commercial construction.
Property valuation online
As Khata certificates and other government documents can be availed of through online procedures, property valuation services can also be availed of online. In order to get a valuation certificate, you can opt for a government valuation of land online. All you need to do is visit the official website of the Registration and Stamp Department and fill out the application form there for e-valuation. Ensure the information filled in is error-free. If required, attach the documents and submit them to complete the procedure.