When you are buying or selling property, you are actually buying or selling both land and the structure built on it. So, while assessing the property value, you must assess the value of both the land and the building built over it.
To assess the value of the property, we need to assess the value of the land separately and the value of the building constructed over it. When we add both the values, we can get the final value of the property. This way we can get the land value and the property value.
To know the real value of the property we can use the following formula:
Reconstruction Cost - Depreciation + Land Value = final Value of the Property
To calculate the value of the built up area, we should calculate the estimated reconstruction cost of the building and the current value by subtracting the depreciation.
Reconstruction Cost is the cost of the similar building made using the similar materials and techniques of the construction.
Depreciation is the loss in the value of a building or its improvement. Building’s current condition, how old it is, method and material used for construction, etc. are the various factors taken into consideration when we calculate the depreciation.
To know the value of the land we can compare the price of the similar property sold recently in the same locality.
This way we can assess the value of the land and the built up area.
The property value calculation is based on multiple factors such as market rate, property type and built, its age, locality, amenities, utilities, etc.
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Authors Of The Question
How is property value assessed to include land and built up area?
Aslam Siddiqui
1114Views
3 Year
2021-06-06T19:30:29+00:00 2021-06-07T19:40:45+00:00Comment
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