Have you received your assessment notice on your commercial property? Then you should be thinking of doing a DIY valuation to check the accuracy of the assessment that you received. To help you begin, there are 3 additional major assessment methods that you can follow, other than using the traditional one, to know whether your assessment is right.
The traditional approach
It is one of the approach methods which is followed by O’Connor to yield accuracy. This effective method has cost, market, and income approaches. Let’s have a look at various methods in the traditional approach.
Pay price for a piece of property = Cost price of building an equivalent building
This is what the cost approach looks like. The commercial property valuation methods clearly estimate the price value that a buyer should pay for a piece of property that sums to the total value of the building in that property. It even includes construction costs, and this is one of the proven methods to yield accurate market value.
The market approach method fixes the price of a property based on the akin properties close to it. It is a study or market research that involves the recent sales data of a particular property type in that neighborhood. It is purely a comparison-based method to reveal equivalent results and it depends on abundant comparable data. Fairness market value is highly helpful in this method. Check whether your property is valued correctly using an online fairness checker.
The income approach is one of a kind that estimates the total income generated from the property and property value is fixed based on that income value. The income of the property is collected using Net Operating Income (NOI). This method is similar to Discounted Cash Flow (DCF) and it markdowns the future rental value of that property by implementing a capitalization rate.
These are the 3 approaches used to determine the accuracy of the assessment for your property. We completely understand that it takes a lot of time and research to carry out these approaches for your property. That is why O’Connor is here to help you out with these best approaches! Call us now! +713.290.9700 to assess your assessment notice!