In order to value your property, we mainly use four types of methods.
The four main types of methods in France.
THE FLOOR AND CONSTRUCTION METHOD
It consists in determining the value of the land in the same sector, increased by the cost of identical construction, decreased by the obsolescence of the property.
They consist in determining the value of a good by analyzing the selling price of other goods known as ” references ” or ” points of comparison “. These other assets are as similar as possible in terms of consistency, condition and location to the asset to be appraised.
These methods consist in obtaining a maximum of references consistent with the property to be appraised.
THE INCOME CAPITALIZATION METHOD
It consists in determining the value of the property according to the rents generated by the rental or that it could receive if the property were free. The link between these rents and the market value is the capitalization rate. This rate measures the site criteria of construction quality and market fluidity.
THE CASH FLOW UPDATE METHOD
It consists in determining for an investor the value of a property from the financial flow provided by the building over a given period. It is little used because it is very complex and delicate because it may prove to be unrepresentative in the future.