Let’s talk about commercial property values. You know those large structures where companies are located? Have you ever pondered what their worth is? It’s not like estimating the cost of a friend’s new phone or evaluating a secondhand automobile, really.
I got interested in this stuff a while back when my buddy was thinking about opening a cafe. He found this great little space for rent but had no clue if the landlord was asking a fair price. That got me digging into how people figure out what these properties are actually worth.
As it happens, it’s not too difficult. Although professionals in this field make a living from it, anyone with a little knowledge may obtain a good idea. That’s what I want to share with you – the tricks I’ve picked up for ballparking commercial property values.
I guarantee there won’t be any fancy real estate jargon or difficult arithmetic as we go through it step-by-step. After finishing this, you should be able to estimate the worth of a storefront or office building with reasonable accuracy. Handy stuff to know, right? So, ready to dive in? Let’s get started!
First things first, we need to understand what makes commercial properties tick. It’s not just about counting bricks or measuring square footage, you know?
Location is a big deal. Is the property in a bustling business district or tucked away in a quieter area? Are there good transport links nearby? These things can make a huge difference.
Then there’s the building itself. How old is it? Is it in perfect condition, or does it require some care? Though a brand-new office building may be more valuable than an older one, antique structures with lots of character are still valuable!
While important, size is not everything. A massive warehouse might be great for some businesses, but others might prefer a compact city-centre spot.
And don’t forget about potential. Can the property be easily adapted for different uses? That adaptability has the potential to be extremely valuable.
Finally, consider the state of the world at large. Is the economy doing well or poorly? Are local businesses expanding or contracting? All this stuff can affect property values.
Though it may seem like a lot to consider, relax. You will become an expert at sizing up commercial properties once you get the hang of it. Are you prepared for the next move? Let’s explore further!
Step 2: Digging Up the Dirt on Recent Sales
Alright, time to play detective! We’re gonna look for buildings similar to the one we’re interested in that have sold recently. It’s like comparing prices at different supermarkets but for buildings.
You can find this info online, in local papers, or by chatting with a real estate agent. Look for sales in the last six months if you can. Jot down the prices and make a note of any big differences between these properties and yours. It might seem tedious, but trust me, this detective work pays off!
Step 3: Playing Spot the Difference
Now comes the fun part – we’re gonna play a grown-up version of spot the difference. Remember those properties we found? Time to compare them to our target building.
Maybe one’s got a fancy new roof, or another’s got a parking lot big enough for a football team. Write down these differences. Then, take a stab at what these extras might be worth. An elevator might add a chunk of change, while a dated air con might knock some off. There is some guesswork involved, but that’s all the fun!
Step4: Compiling the Data (Don’t Stress, It’s Not Hard Math)
Now is the appropriate moment to pull out your phone’s calculator app. I guarantee you won’t have flashbacks to algebra in high school when we do some quick math.
Take those prices we jotted down earlier and tweak them based on the differences we spotted. Then, we’re just gonna average them out. Add ’em all up and divide by how many properties you looked at. Boom! You’ve got yourself a ballpark figure. While not perfect, it’s a good place to start. I mean, who said math couldn’t be enjoyable?
Step 5: The Secret Sauce: Unique Features
Now, let’s talk about what makes your property special. Maybe it’s got a view that’d make a postcard jealous, or a location so prime you could practically charge admission.
This is where things get a bit tricky and where industrial property valuers really earn their keep. These pros look at stuff like zoning laws, future development potential, and even the building’s history. But hey, we can take a stab at it too! Think about what makes this property stand out. Is it super energy-efficient? Does it have a cool industrial vibe? These quirks can bump up the value, so don’t ignore ’em!
Step 6: Consolidating Everything: The Reality Check
Well, we’ve arrived at the finish line! It’s time to face reality now. Examine the figure closely that you computed before. Does it feel right in your gut?
This is where you channel your inner property guru. Think about the market trends, the unique features we talked about, and any upcoming changes in the area. Maybe there’s a new subway line coming or a big company moving in nearby. These could shake things up. Embrace your gut feeling and don’t be hesitant to enquire around. A new set of eyes can occasionally pick up on details you’ve overlooked. Congrats, you’re now armed with a pretty solid estimate!
Pro Tips Just for You
Before making your decision, take a step back and look at your estimate as a whole:
Does it seem reasonable based on everything you know about the property and the local market?
Have you considered all the important factors?
Do you have any questions or concerns that would require further investigation?
If something seems off, don’t be hesitant to go back and revise your estimate. Gaining proficiency in property value estimation requires experience and a combination of science and art.
Wrapping Up
We hope you found this guide helpful in understanding how to estimate the value of a commercial property. Remember, it’s all about getting familiar with the process and using your market knowledge to make an informed estimate.
There’s always more to learn on this topic! So stay curious and keep exploring new resources for honing your skills as a property evaluator. And never forget that practice makes perfect, even if you’re still not quite there. Your ability to accurately estimate a property’s value will improve with the number of properties you examine.
However, if you are somewhat in doubt, never hesitate to consult the professionals. They might give you an insight or two. In such cases, contact Australian Valuations. They are sure to guide you in the right direction, especially when it comes to property and equipment valuation.
