Valuation of the property is an establishment of a market, replacement or cadastral value of the property by an appraiser.
Market value is determined for the property, which can be traded on the market, and the replacement value is for the property, which, due to the current purpose or use, cannot be the subject of such trading. To estimate the market value of the property, you can use one of the two methods: comparative or profitable.
In the comparative method, one should refer to the prices that were previously obtained for similar properties on the market. You should of course take into account the reasons of the differences between these prices. You can also take into account the price of the tender, but only if they do not differ by more than 20% from the average market price. Based on these estimates, the market price is determined.
In the income approach, we assume that the owner of the property will have an income from the property, such as rents. Then, we should estimate the annual income that the property will bring (you can use the data from the previous year), and then include it in the final valuation.
When it comes to replacement value we must take into account the cost of restoring the property to the state, in which it will be able to appear on the market again. Then the value of the property is reduced by the amount of these costs.