Commercial Real Estate Appraisal
September 25th, 2007 Posted in AppraisalMaking commercial real estate appraisal is an exercise in which you may need to combine art with science since it requires gathering as well as analyzing data before you can arrive at a studied decision about the actual value of real estate. Thus, it is not surprising to learn that those who do commercial real estate appraisals have come up with techniques such as the cost approach and income approach as well as the sales comparison approach that help them evaluate different types of properties.
Which approach you use depends on the individual features of the property in question though using cost approach has its advantages for commercial real estate when the properties are quite new? However, when such properties become old, the cost approach is not so useful?
Another approach that can be used for commercial real estate appraisal is to use the sales comparison approach which is useful for those properties that are occupied by their owners. In this approach, there is need to obtain data with regard to properties that are quite similar and that have only recently been sold in which the appraiser will then make adjustments in order to arrive at the correct market value of the property in question.
Another approach to commercial real estate property is the one known as income approach and this approach is ideally suited for properties that generate income or which are bought as investment opportunities.
You can use any of these approaches to commercial real estate appraisal if you want to find a suitable means to valuate the property and thus realize its true worth.
