How to Determine the Resale Value of a Flat?

Hi buddy. Generally, to calculate resale value of flat you have to take into account a number of factors, including its location, age and condition, view from the property, floor layout, market value of comparable properties, clearance rates, etc. 

However, I calculated my flat’s resale value directly from the below formula:

Resale Flat Value = Value of the undivided share of land (UDS) + depreciated building and amenity value + value of overhead, other costs, etc.

This is the basic formula for how to calculate value of resale flat.

You can use the guideline value, ready reckoner rate, or circle rate per square foot to find out the UDS. However, you can compute the UDS value directly by following the below method:

• First, calculate the product of the size of each unit and the total land area.

• Now divide the result by the total area of all the apartments in the project.

Generally, the depreciation value is 5%. Moreover, you can find the depreciation rate of a resale flat by using the below formula:

Annual depreciation expense = [(Original cost-residual value)/useful life]

Now talking about the overhead or indirect cost, these include things like bank charges, real estate taxes, court costs, interest on mortgages, rent, maintenance, and supplies. You can find it by dividing the indirect costs by the direct costs, then multiply the result by 100 to get the overhead rate.

I hope this helps you get an idea of how is flat resale value calculated.

The old flat resale value

depends on many factors such as the location of the property, size, amenities, market value, clearance rate, floor plans and other charges. If you are moving to Bangalore you need a house near to your job location. Areas like Prestige Tech Park, Electronic City, JP Nagar, Koramangala, are good places to stay considering your job location. The prices of property are higher in this area as they are located near the job locations and anyone would want to purchase property from here to avoid traffic! 

You can also purchase property in the outskirts of Bangalore such as Bannerghatta National Park (21 Km from Bangalore), Manchinbele (36 Km from Bangalore), Devanahalli Fort (37 km from Bangalore), Nrityagram (38 km from Bangalore), Savandurga Hill (48 km from Bangalore). These places have lower property rates compared to other places in Bangalore.

I have recently purchased a property in JP Nagar and this is how I have learned

how to calculate resale value of flat in Bangalore

• Value or resale flat = value of an undivided share of land + depreciated value of building and amenities + value of overheads, expenses, etc.

• I have checked different real estate websites and tried making an estimate.

• Reached out to real estate agents and discussed the property rates with them.

• Tried to make an estimation by calculating the value of the property per sq. ft. This value varies from place to place. You need to check out the property rates and calculate the value. The value of the property depends on the depreciation rate which increases by 1.5% every year.

• Tried to keep an account of the construction costs.

I hope this was helpful.