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Building Valuation and Its Needs

Building valuation is the process of evaluating the current marketable cost of the building of any particular building structure. It will be based on the type of the structure, size, location, shape, and width of roads, types, frontage, and quality of the building materials used in it. The cost of these materials also will be included in these aspects. The building valuation will also contribute to the height of the plinth, the height of the building, the nature of the structure, and the thickness of the walls in the building.

The Key Needs of Building Valuation

Buying the property:

When you are looking to buy or sell the property, you should know about the value of the building, and this will help in determining the value for it.

Taxation:

When you want to assess the tax of property, it is necessary to have a valuation. Taxes may be included municipal tax, property tax, health tax, and several others. All these will be fixed on the valuation of the structure.

Mortgage or security of loans:

When the loans are taken for the security of the property, it is necessary for the valuation.

Rent function:

When you want to determine the rent of the property, you should have the valuation for the property. The rent is usually fixed on some percentage of the amount of valuation, like 6 to 10 percent of the structure of the building.

Compulsory acquisition:

If a property is acquiring by law, the compensation is paid to the owner on some basis. To find such an amount of compensation, the property should be evaluated.

Scrap value:

It is defined as the value of the dismantled materials for the property. For the building, when the life is over the end of the utility period, several products in the building that has to be dismantled, like timber, bricks, steel, etc., will fetch a certain value. This is called the scrap value of the building.

Salvage value:

It can be defined as the approximate resale value of the property at the end of the useful life. The salvage value is usually deducted from the cost of the fixed asset to define the amount of the asset cost that will be depreciated at the end.

Market value:

The value and the cost of the property will be changing based on time. When you want to determine the market value of the property at any particular time, it is necessary to opt for the valuation.

Book value:

It is the amount given in the account book after allowing the necessary depreciation. The book value of the property at any particular year will be the original cost minus the amount of depreciation of the previous year to get the right value.

Final thoughts

Have you now got a detailed view of the land and building evaluation? Ensure you are evaluating the value of the property whenever needed and making the maximum benefits out of it.