Land appraisal is subdivided into mass cadastral appraisal land plots and market valuation of single plots.
Cadastral appraisal of land plots is a mass appraisal, which is a set of administrative and technical actions to establish the cadastral value of land plots within the boundaries of an administrative-territorial entity by appraised zones.
The state cadastral valuation of lands is carried out using a unified methodology in order to ensure the comparability of the assessment results throughout the entire territory. Russian Federation... the main objective cadastral valuation- creation of a base for taxation. The purpose of the market appraisal of a land plot is to determine the market (investment, liquidation) value of a single land plot as of the date of appraisal by independent appraisers in accordance with accepted standards and appraisal methods.
Mass appraisal characterizes a set of appraisal objects and application to groups consisting of a large number of them, a single, general algorithm for deriving value. The mass appraisal model may contain a time factor, but for an individual appraisal this is not typical, since analog objects are selected directly to the date of appraisal. ...
As world experience shows, in addition to fiscal goals, mass valuation can solve the following tasks:
valuation for collateral portfolio management;
determination of the starting price at auctions;
determination of the redemption price of land in state or municipal ownership;
calculation of rates rent for real estate objects;
economic substantiation of the cost of seizing land plots for state needs and planning the estimate of projects related to such seizure;
improving the efficiency of real estate management.
Both types of valuation - mass and individual - are based on systematic methods of collecting, analyzing and processing market information to obtain well-founded results. In the process of mass appraisal, the appraiser has to carry out the same actions as in the individual appraisal, the differences are mainly related to the difference in the scope of work and methods of quality control of the appraisal.
Since mass evaluation presupposes the development of a standard methodology, it requires not only coordination of the problem, but also decision-making and a unified evaluation procedure. The weight of an expert's decision and the ability to influence the final result is less than with an individual assessment. In addition, valuation models should reflect the supply and demand patterns of groups of properties rather than individual units. Since the valuation model is viewed as a mathematical interpretation of the behavior of the real estate market at a particular time, mass valuation of the model is more difficult as they try to replicate market activity over a wide geographic area.
In both mass and individual valuation, three main approaches are used - comparative, profitable and costly. The choice of specific methods is determined by the type of property, the state of the market and the availability of the necessary information. Both types of assessment, using the same approaches and methods, differ in the assessment methodology: the depth of analysis of the most important pricing factors, as well as the volume and methods of processing used to assess information.
Just as in an individual appraisal, a mass appraisal analyzes the best use. Market analysis for the purpose of mass appraisal assumes the wide use, along with expert methods, of statistical methods that help to stratify data and build an adequate market model. In some cases, when certain market segments are underdeveloped, it makes sense to talk about the type of the estimated value (investment value). Building and calibrating models also have special features.
In an individual assessment to derive the final value, the assessor reconciles the results of the three approaches and makes a final decision. In mass evaluation, its final stages are model validation and quality control of the results obtained. The quality of the work performed is assessed mainly by statistical methods: most of the estimates obtained should fall within the specified range of the average deviation from the real sales prices. Along with statistical control, expert control is carried out to compensate (if necessary) for the insufficient quality of the initial information on market transactions. In addition, the assessment must comply with existing professional standards, and for mass assessment, in addition to ethical and meaningful, there are a number of statistical criteria for the quality of the model. Thus, the standards of the International Association of Tax Appraisers require that the coefficient of variance, which determines the average deviation, for residential properties does not exceed 15%, and for the group of profitable real estate 20%.
It should be emphasized that individual and mass ratings are not interchangeable. Each of them has its own area of application. Mass appraisal is for the simultaneous appraisal of a large homogeneous group of objects for tax purposes, and individual appraisal is for appraisal market value individual objects when conducting various market transactions. Both assessments can only complement each other in the cases necessary for this.
Thus, the following differences can be distinguished between mass and individual assessments:
1) the object of assessment;
2) the number of objects of assessment;
3) the complexity of the assessment;
4) the qualifications of the performers;
5) the amount of information processed and created in the course of work;
6) formation of a list of objects of assessment;
7) determination of the factors of the value of the objects of appraisal;
8) revision of information about the values of the pricing factors of the objects of assessment;
9) grouping of objects of assessment;
10) modeling the value of the objects of appraisal;
11) checking the quality of the results obtained;
12) algorithm for calculating the cost of objects;
13) accuracy of results;
14) the formation of information resources based on the results of the assessment.
In general, it can be concluded that both mass and individual appraisals are systematized types of appraisal designed to model markets, including the land market. They are based on the same principles, including the principle of the most efficient use, but differ in the scale of modeling, methods of measuring the pricing characteristics of objects, algorithms for processing market information and final indicators. The information obtained in the process of the state cadastral appraisal can be used to determine the market value of land plots.
When conducting an appraisal, an appraiser is obliged to use (or justify a refusal to use) cost, comparative and profitable approaches to appraisal. The appraiser shall have the right to independently determine, within the framework of each of the approaches to appraisal, specific methods of appraisal. This takes into account the volume and reliability of market information available for the use of a particular method.
As a rule, when assessing the market value of land plots, the sales comparison method, the allocation method, the allocation method, the method of capitalization of land rent, the remainder method, and the method of intended use are used.
The comparative approach is based on the sales comparison method, the allocation method, the distribution method. The income approach is based on the land rent capitalization method, the remainder method, and the intended use method. Elements of the cost approach in terms of calculating the cost of reproduction or replacement of land improvements are used in the remainder method and the allocation method.
The following is the content of the listed methods in relation to assessing the market value of land plots occupied by buildings, structures, structures or intended for their placement, as well as the features of assessing the market value of agricultural land.
If other methods are used in the valuation report, it is advisable to disclose their content and justify their use.
Sales comparison method
The method is used to assess land plots, both occupied by buildings, structures and (or) structures (hereinafter - built-up land plots), and land plots not occupied by buildings, structures and (or) structures. tions (hereinafter - undeveloped land plots). The condition for applying the method is the availability of information on the prices of transactions with land plots that are analogous to the one being assessed. In the absence of information on the prices of transactions with land plots, the use of supply (demand) prices is allowed.
· Determination of the elements by which the comparison of the object of assessment with the objects - analogs (hereinafter referred to as comparison elements) is carried out;
· Determination for each of the comparison elements of the nature and degree of differences of each analogue from the estimated land plot;
· Determination, for each of the comparison elements, of price adjustments of analogs, corresponding to the nature and degree of differences of each analogue from the estimated land plot;
· Adjustment for each of the elements of the comparison of prices of each analogue, smoothing out their differences from the estimated land plot;
· Calculation of the market value of a land plot by means of a reasonable generalization of the corrected prices of analogs.
The elements of comparison include the factors of the value of the appraised object (factors whose change affects the market object value estimates) and the characteristics of transactions with land plots prevailing in the market.
The most important cost factors are usually:
location and environment;
intended purpose, permitted use, rights of other persons to the land plot;
physical characteristics(relief, area, configuration, etc.);
infrastructure (availability or proximity engineering networks and the conditions for connecting to them, social infrastructure facilities, etc.).
The characteristics of transactions with land plots include, inter alia:
1) the conditions for financing transactions with land plots (the ratio of own and borrowed funds, the conditions for the provision of borrowed funds);
2) the terms of payment for transactions with land plots (payment in cash, settlement by promissory notes, offsetting, barter, etc.);
3) the circumstances of the transaction with the land plots (whether the land plot was presented to the open market in the form of a public offer, the affiliation of the buyer and the seller, sale in bankruptcy, etc.);
4) change in prices for land plots for the period from the date of the transaction with an analogue to the date of the valuation.
The nature and degree of differences between the analogue and the estimated land plot are established in the context of comparison elements by directly comparing each analogue with the object of assessment. In this case, it is assumed that the transaction with the subject of assessment will be made based on the characteristics of transactions with land plots prevailing in the market.
Adjustments to the prices of analogs by comparison elements can be defined as for the price of a unit of measure of an analogue (for example, hectare, square meter), and for the price of the analogue as a whole. Price adjustments can be calculated in monetary or percentage terms.
The magnitude of price adjustments is usually determined in the following ways:
· Direct pairwise comparison of the prices of analogs that differ from each other only in one comparison element, and determination, on the basis of the information obtained in this way, of adjustments for this comparison element;
· Direct pairwise comparison of the income of two analogs that differ from each other only in one comparison element, and determination, by capitalization, of the difference in income of the adjustment for this comparison element;
· Correlation and regression analysis of the relationship between the change in the comparison element and the change in the prices of analogs (prices of units of measurement of analogs) and the determination of the relationship equation between the value of the comparison element and the value of the market value of the land plot;
· Determination of costs associated with changing the characteristics of the comparison element, according to which the analog differs from the object of assessment;
· Expert justification of price adjustments for analogs.
As a result of determining and making adjustments, the prices of analogs (units of measurement for analogs), as a rule, should be close to each other. In case of significant differences in the adjusted prices of analogs, it is advisable to choose other analogs; elements to be compared; adjustment values.
Selection method
Conditions for applying the method:
availability of information on the prices of transactions with single real estate objects, similar to a single real estate object, which includes the estimated land plot. In the absence of information on transaction prices, the use of bid prices is allowed);
correspondence of improvements to the land plot to its most efficient use.
The method assumes the following sequence of actions:
1) determination of the elements for which the comparison of a single real estate object, which includes the estimated land plot, with objects - analogs;
2) determination for each of the comparison elements of the nature and degree of differences of each analogue from a single real estate object, which includes the estimated land plot;
3) determination, for each of the comparison elements, of price adjustments of analogs, corresponding to the nature and degree of differences of each analogue from a single real estate object, which includes the estimated land plot;
4) adjustment for each of the price comparison elements of each analogue, smoothing out their differences from a single real estate object, which includes the estimated land plot;
5) calculation of the market value of a single real estate object, including the estimated land plot, by reasoned generalization of the adjusted prices of analogues;
6) calculation of the cost of replacement or the cost of reproduction of improvements of the assessed land plot;
7) calculation of the market value of the assessed land plot by subtracting from the market value of a single real estate object, which includes the assessed land plot, the replacement cost or the cost of reproduction of improvements to the land plot.
The amount of costs for creating improvements to a land plot can be determined using aggregated and (or) elemental cost indicators.
The aggregated cost indicators include both indicators characterizing the parameters of the object as a whole - square, cubic, running meter, and indicators for complexes and types of work.
Elemental values are the elemental prices and rates that are used to determine the cost of creating improvements.
Aggregated and elemental cost indicators calculated at the price level fixed on a specific date (basic price level) can be recalculated to the price level on the valuation date using a system of current and forecast indexes of changes in construction costs.
The calculation of the amount of costs for creating improvements using elemental cost indicators can also be carried out using resource and resource-index methods. Resource (resource-index) methods consist in calculating in current (forecast) prices and rates of all resources (cost elements) required to create improvements.
When determining the amount of costs for creating improvements to a land plot, one should take into account the investor's profit - the amount of the most probable remuneration for investing capital in creating improvements. The investor's profit can be calculated as the difference between the selling price and the cost of creating similar objects. The investor's profit can also be calculated as the return on capital at its most likely investment of the same level of risk.
When determining. the cost of replacement or the cost of reproduction is taken into account the amount of accumulated depreciation of improvements.
The accumulated depreciation of improvements can be defined in whole or in monetary terms as the sum of physical, functional and part of the economic depreciation attributable to improvements.
Physical deterioration is the loss of the cost of improvements due to the deterioration of their physical properties.
Functional wear is the loss of the cost of improvements caused by the discrepancy between the space-planning solution, building materials and engineering equipment of the improvements, the quality of the construction works or other characteristics of improvements to the current market requirements for this type of improvement.
Economic depreciation is the loss of value of a single property, due to the negative impact of external factors in relation to it.
Physical and functional wear and tear can be removable and irreparable. Economic wear and tear is usually irreparable. At the same time, depreciation is removable if the cost of its elimination is less than the increase in the value of the property as a result of its elimination.
Distribution method
The method is used to assess built-up land plots.
Conditions for applying the method:
· Availability of information on the prices of transactions with single real estate objects, similar to a single real estate object, which includes the estimated land plot. In the absence of information on transaction prices, the use of supply (demand) prices is allowed;
· Availability of information on the most probable share of the land plot in the market value of a single real estate object;
· Correspondence of land plot improvements to its most efficient use.
The method assumes the following sequence of actions:
determination of the elements by which the comparison of a single real estate object, including the assessed land plot, with analogous objects is carried out;
determination for each of the comparison elements of the nature and degree of differences of each analogue from a single real estate object, which includes the estimated land plot;
determining, for each of the comparison elements, price adjustments of analogs corresponding to the nature and degree of differences of each analog from a single real estate object, which includes the estimated land plot;
adjustment for each of the comparison elements for the prices of each analogue, smoothing out their differences from a single real estate object, which includes the estimated land plot;
calculation of the market value of a single real estate object, including the estimated land plot, by reasoned generalization of the adjusted prices of analogues;
calculation of the market value of the appraised land plot by multiplying the market value of a single real estate object, which includes the appraised land plot, by the most probable value of the share of the land plot in the market value of a single real estate object.
Land rent capitalization method
The method is used to assess built-up and undeveloped land plots. The condition for the application of the method is possible the possibility of obtaining land rent from the appraised land plot.
The method assumes the following sequence of actions:
1) calculation of the land rent created by the land plot;
2) determination of the value of the corresponding coefficient of capitalization of land rent;
3) calculation of the market value of a land plot by capitalizing land rent.
Capitalization of land rent is understood as the determination at the date of the valuation of all future values of land rent equal to each other or changing at the same rate for equal periods of time. The calculation is made by dividing the amount of land rent for the first period after the date of the assessment by the corresponding capitalization ratio determined by the appraiser.
Under this method, the amount of land rent can be calculated as income from the lease of a land plot under the conditions prevailing in the land market.
The main methods for determining the capitalization ratio are:
· Dividing the amount of land rent for similar land plots by the price of their sale;
· An increase in the risk-free rate of return on capital by the amount of the risk premium associated with investing capital in the assessed land plot.
At the same time, the risk-free rate of return on capital is understood as the rate of return for the least risky investment of capital (for example, the rate of return on deposits of banks of the highest reliability category or the rate of return to maturity on government securities).
Remainder method
The method is used to assess built-up and undeveloped land plots. The condition for the application of the method is the possibility of building up the estimated land new site with income-generating improvements.
The method assumes the following sequence of actions:
calculation of the cost of reproduction or replacement of improvements corresponding to the most efficient use of the estimated land plot;
calculation of net operating income from a single property for a certain period of time based on market rental rates;
calculation of net operating income attributable to improvements for a certain period of time as the product of the cost of reproduction or replacement of improvements by the corresponding capitalization ratio of income from improvements;
calculation of the amount of land rent as the difference between the net operating income from a single property for a certain period of time and the net operating income attributable to improvements for the corresponding period of time;
calculation of the market value of a land plot by capitalizing land rent.
The method also allows the following sequence of actions:
1) calculation of the cost of reproduction or replacement of improvements corresponding to the most efficient use of the estimated land plot;
2) calculation of net operating income from a single property for a certain period of time based on market rental rates;
3) calculation of the market value of a single real estate object by capitalizing net operating income for a certain period of time;
4) calculation of the market value of a land plot by subtracting from the market value of a single real estate object the cost of reproduction or replacement of improvements.
Net operating income is equal to the difference between actual gross income and operating expenses. However, only those operating expenses that are normally borne by the lessor are deducted from the actual gross income.
Actual gross income is equal to the difference between potential gross income and losses from downtime and losses from non-payments for rent.
The potential gross income is equal to the income that can be obtained from the lease of the entire area of a single property in the absence of losses from non-payment of rent. When appraising a land plot, rental rates for the use of a single real estate object are calculated based on market rental rates (the most probable rental rates at which the appraised property can be leased out for open market in a competitive environment, when the parties to the transaction act reasonably, having all the necessary information, and no extraordinary circumstances are reflected in the rental rate).
For vacant premises used by the owner for their own needs, market rental rates are also used. Potential income includes other income earned from inseparable improvements to the property, but not included in the rent.
The amount of operating expenses is determined based on market conditions for the lease of single real estate objects. Operating expenses are subdivided into: fixed - not depending on the level of occupancy of a single real estate object, variables - depending on the occupancy rate of a single real estate object and expenses for replacing improvement elements with a term of use less than the term of use of improvements in general (hereinafter - elements with short term use). Operating expenses do not include depreciation deductions on real estate and the cost of servicing debt obligations on real estate.
The cost of replacing short-lived enhancement items is calculated by dividing the cost of generating these enhancement items by their useful life. In the process of performing these calculations, it is advisable to take into account the possibility of a percentage increase in cash to replace elements with a short period of use.
Administrative expenses are included in operating expenses regardless of who manages the property - the owner or the manager.
When calculating the capitalization ratio for land improvements, the most likely rate of change in income from improvements and the most likely change in the cost of improvements should be taken into account (for example, when the cost of improvements decreases, take into account the return on capital invested in the improvements).
Intended use method
The method is used to assess the built-up and undeveloped land plots. weaving.
The condition for applying the method is the possibility of using the land plot in a way that generates income.
The method assumes the following sequence of actions:
· Determination of the amount and time structure of expenses required for the use of the land plot in accordance with the option of its most efficient use (for example, the cost of creating improvements to the land plot or the cost of dividing the land plot into separate parts, differing in the forms, type and nature of use);
· Determination of the size and time structure of income from the most efficient use of the land plot;
· Determination of the amount and time structure of operating expenses required to generate income from the most efficient use of the land plot;
· Determination of the value of the discount rate corresponding to the level of risk of capital investment in the estimated land plot;
· Calculation of the cost of a land plot by discounting all income and expenses associated with the use of the land plot.
In this case, discounting refers to the process of bringing all future income and expenses to the date of the assessment at the discount rate determined by the appraiser.
To bring all future income and expenses to the valuation date, discount rates are used that are derived from an analysis of the rates of return on capital for investments of similar risk levels.
The source of income can be leasing, economic use of a land plot or a single property, or the sale of a land plot or a single property in the most likely time frame at market value.
The calculation of income in the option of renting out real estate should include accounting for income from the sale of a single property at the end of the forecast period.
Features of assessing the market value of agricultural land.
The assessment of agricultural land plots is carried out on the basis of their permitted, sustainable and most effective use, taking into account the peculiarities of the agricultural zoning of the territory.
To conduct an assessment within the boundaries of an agricultural land plot in accordance with its explication, the following are allocated:
agricultural land (arable land, hayfields, pastures, fallow lands and perennial plantations);
land occupied by buildings, structures, structures used for the production, storage and primary processing of agricultural products;
lands occupied by on-farm roads, communications, trees and shrubs designed to ensure the protection of lands from the impact of negative (harmful) natural, anthropogenic and man-made phenomena, closed water bodies.
The market value of an agricultural land plot is determined on the basis of an assessment of its agricultural land and land occupied by buildings, structures, structures used for the production, storage and primary processing of agricultural products. In this case, the market value of the assessed land plot is determined taking into account the characteristics of the lands included in its composition, occupied by on-farm roads, communications, tree and shrub vegetation, intended to ensure the protection of lands from the effects of adverse natural, anthropogenic and man-made phenomena, closed water bodies that cannot be used for business activities.
Agricultural land and enclosed bodies of water that can be used for entrepreneurial activities (for example, fishing) are usually valued using the sales comparison method or the rent capitalization method.
Lands occupied by buildings, structures, structures used for the production, storage and primary processing of agricultural products are assessed by methods of assessing built-up or intended for building land plots. Land under farm buildings (sheds and other non-capital buildings) located on agricultural land is assessed as agricultural land.
When assessing the market value of agricultural land by the method of comparison of sales and by the method of capitalization of land rent, the fertility of the land plot, as well as the influence of environmental factors, should be taken into account in the composition of the cost factors. The main factors that determine the fertility of a land plot, in particular, include: the qualitative characteristics of the soil layer of the land plot (nutrient content, moisture supply, aeration, mechanical composition, structural composition, acidity, etc.), relief, microclimate.
When assessing the market value of agricultural land by capitalization of land rent, there are features of the calculation of land rent associated with adopted system accounting for the fertility of the land.
Land rent is calculated as the difference between gross income and the cost of agricultural production, taking into account the entrepreneur's profit. Gross income is calculated for a unit of land plot as the product of the normative yield of an agricultural crop by its market price.
The normative yield of an agricultural crop is determined by the fertility of the land plot, measured in bonitet points.
The choice of the main and accompanying agricultural crops for which the calculation of the land rent is carried out is carried out from a set of crops typical or traditionally cultivated at the location of the land plot. At the same time, the criteria for choosing crops and their alternation are to ensure the highest income and preserve soil fertility.
Material costs for the production of agricultural products are determined on the basis of technological maps that establish the standard costs of seeds, fuels and lubricants, fertilizers, etc. in kind.
The calculation of costs in monetary terms is carried out based on the prevailing market prices in the area where the land plot is located.
When calculating costs, the level of engineering arrangement of the land plot is taken into account, including the density road network, class of roads, proximity to highways, points of processing of agricultural raw materials and centers of material and technical supply.
When calculating the gross income from arable land, the possibility of obtaining several harvests during one season for vegetable products and medicinal plant products can be taken into account. The deposit is assessed by the method of intended use, taking into account the economic feasibility of its transfer to a different type (s) of agricultural land.
When calculating the gross income of hayfields and pastures, one should proceed from their standard yield. The normative yield of hayfields and pastures is determined by its conversion into centners of fodder units (1 centner of fodder units is equal to 1 centner of oats). In this case, the amount of gross income is determined on the basis of the market price of oats.
When calculating the gross income of perennial plantations, it is recommended to proceed from the frequency of their fruiting and the standard yield of fruit and berry products. This takes into account:
1) age of perennial plantings;
2) species and varietal composition of perennial plantations;
3) features of the spatial distribution of perennial plantations within the boundaries of the land plot;
4) the possibility of earning income from additional products received from the aisles of orchards and vineyards.
In general, summing up, we can say that real estate appraisal requires an individual approach in each case. Many factors affect the value of real estate. It is not easy to understand all the nuances and draw the right conclusions. The appraiser requires skills and a sense of the market situation. For each case and each type of value, different approaches and methods will have a higher priority, which is what the evaluator needs to determine.
5 / 5 (votes: 2 )
At this time big cities are experiencing a situation that requires the determination of a market justified level of land value, on which the mass valuation of land is based. To do this, it is necessary to maintain an economically fair balance of interests of all: owners, users of land plots and the municipality, as well as requirements for the rational use of the city's territory. The practical tasks facing the city include both a fiscal function (filling the city's budget) and a regulatory function.
Diverse challenges facing are associated with the determination of different types of values of land plots according to different tasks (for example, with the aim of determining urban planning or land cadastral valuation) or making an appropriate adjustment to a certain "base" cost according to the specifics of a specific task. From the experience of foreign countries it can be seen that the basis of the methodology for fiscal calculations is the mass appraisal of land. It includes the market value of housing, rental income from commercial development and the cost method for properties with low liquidity.
At the moment, the country is solving this problem through the methodology for calculating the cadastral value of land, settlements, which was prepared by Roszemkadastr on the basis of the methodology adopted at the federal level. But there is one more, in our opinion, a significant flaw. Based on the data on sales of developed land plots, the cadastral value of land is calculated using the "extraction" method, in the Valuation Standards that are mandatory for application by the subjects of appraisal activities, it is called the "allocation method".
This method requires knowledge of the area of the land plot or data on the ratio of the land share (the ratio of the area of land per 1 sq. total area the apartment for sale). The technical instructions of this method state that this indicator must be determined on the basis of a table or according to the schedule of the year of construction of the area - (SNiPs in force at that time), which regulated the density of development and the number of storeys of residential buildings.
Today, a mass economic assessment of the city's land objects is carried out using a method that was previously technically impossible to apply, because it involved a large number of calculations and multidimensional classifications. Such techniques are characterized by cluster and correlation-regression analysis, methods of pairwise comparisons and prioritization, systematic approach and the formation of databases.
Applying these methods, it is possible to achieve an increase in the scientific validity of management decisions and to qualitatively analyze the work of this approach. For example, the calculation of the cost of land based on data on apartment sales can be done in two approaches (methods):
- Calculation based on all sales data for the “reference” apartment for this segment and only then the calculation of the land value using the allocation method. The advantage of this method is to simplify the forthcoming calculations (only for one apartment), and the disadvantages include the high probability of an error in choosing a reference apartment using the methods of paired comparisons, bringing the apartment to the reference one and, therefore, the possibility of a large inaccuracy of the results.
- Determining the value of land in a specific area for each of the apartments being sold. Here the calculations are more complicated (for the entire set of data), but the percentage of accuracy increases.
For example, in a certain residential area there are six houses of different storeys, and public facilities are located.
According to the schedule, the need for territory for travel, sidewalks, parking lots, areas and landscaping is calculated, which falls on 1 inhabitant, taking into account the average number of storeys in the quarter of 7.3: and it is equal to 4.2 + 11.1 = 15.3 m2 / person ... It turns out that for a population of 1370 people in the quarter, 20961 m2 of housing area is needed, and the real area is 12055 m2. Moreover, the area for shopping facilities is allocated 10 times more, based on the SNiP standards, and gives the city authorities a reason to think about placing such facilities in this quarter.
It is necessary to start calculating the cadastral value of 1 sq. M. land in a residential area. The average price of 1 sq. M of an apartment put up for sale at the beginning of 2005 was determined by 19 thousand rubles, while the average price of 1 sq. M. apartments in new buildings are equal to the amount of 9333.38 rubles excluding VAT. Therefore, taking into account the average depreciation of buildings in the quarter of 15%, we single out the price of 1 sq.m. apartment falling on the ground, it is equal to 9639 rubles. Using the coefficient of the land share, we calculate the market value of 1 sq. M. living space in the quarter, it is equal to 24,714 rubles / sq. m.
The experience of foreign countries shows that the cadastral value of land falls from 50 to 70% of the market value, it turns out that it is determined about 24,714-0.6 = 15,000 rubles. Taking into account the amount of rent for the year from 3 to 7% of the cadastral value of the land, in this case it will be equal to 15000-5% = 750 rubles per square meter of land.
This is a very low amount for a trade object (it is equal to a tenth of the cost of renting premises for commercial purposes in a given area), and it can bring a significant replenishment to the city budget, because it is almost ten times more than the base rent for land use.
When compared with another quarter of the city with one residential four-storey building and several objects non-residential real estate according to the schedule, the required area of a plot of land for the purpose of servicing those living in the quarter is 15.6 + 5.8 = 21.4 sq. m / person, or 1819 sq. m. m. According to calculations, the area of the land plot, which falls on a residential building, is equal to 7 343.1 sq. m. The ratio of commercial premises to residential premises also significantly exceeds the SNiP standards.
With similar calculations of the amount of rent for a plot of land, we find out that it is approximately four times less, which characterizes the ineffective use of land in a residential area. It is possible to solve these problems by increasing the share of residential buildings in this quarter, because now to invest cash housing construction is a very profitable business. In this case, the value of the coefficient of the land share decreases, the cadastral value of the land rises and, consequently, the rent of the used territory in the quarter rises, which, of course, will bring revenues to the budget of the district and the city.
Consequently, the mass land valuation acts as the economic basis for urban real estate management, which contributes to the rational use of urban areas, replenishment of the city and district budget. If you have any questions regarding the mass appraisal of land, you can seek advice from the NP "Federation of Judicial Experts", where you will receive qualified advice on the issues that have arisen, you can order the calculations of the mass appraisal of land.
If you are interested not only in the topic of land appraisal, but in related issues, such as real estate appraisal, then we are pleased to inform you that we will be happy to conduct a real estate appraisal for you, and not only in Moscow and the Moscow region, but also in all regions of the Russian Federation.
Prices
NOTE:
The price of services for the appraisal of land plots is indicated including taxes. Transport costs are paid separately.
V ... Land valuation
For the full participation of land plots in market relations, their adequate assessment is necessary. The high cost of land plots does not cause a desire to involve them in economic circulation. The underestimation gives rise to inefficient land use in agriculture and forestry, as well as an irrational model of urban development, for example, the location of industrial zones in the central part of the city, as well as environmentally harmful enterprises.
The earth, in its various functional purposes, is like natural resource, the basis for the formation of the living environment of the population, the real estate object and the main means of production - are subject to cost estimation.
Assessment object is a land plot without real estate objects and its subsoil located on it.
Purpose of land valuation dictated by the following circumstances:
Determining the value of a land plot is the first stage of the cost method when evaluating any real estate object.
To determine the taxable base.
For insurance purposes (for land, the subject of insurance may be flooding of the territory, environmental pollution, erosion and a decrease in soil fertility).
To justify the starting prices for competitive sales, for corporatization of enterprises, division of shares, for mortgage lending, when determining the size of the rent.
To justify the option of the best and most effective use (NNEI) of any property complex. The selection criterion for the considered alternatives is the maximization of the residual value of the land. The potential of a land plot (due to its location, market conditions, legal possibilities and resource parameters) is a decisive argument when making an investment decision.
Land valuation by latitude is divided into two types: massive cadastral appraisal of land plots and market appraisal single land plot.
The purpose of the cadastral valuation is the simultaneous determination of the cadastral value of all land plots within the boundaries of administrative-territorial entities (regions, districts, cities, towns, etc.) according to the estimated zones at the beginning of the next year.
The purpose of market valuation is the determination of the market value of a single land plot as of the date of appraisal by independent appraisers in accordance with accepted standards and appraisal methods.
Agricultural and forest land assessed by their productivity, nature conservation and recreational importance, location.
Lands of cities and towns are evaluated according to their functional purpose, taking into account the saturation of the building, location features, ecological state, social and engineering and transport facilities and other consumer characteristics.
Differences in the types of assessment cause differences in the assessment procedure. To carry out a mass appraisal, significant personnel are required, the development of special methods that allow unifying the process of evaluating a large number of heterogeneous objects, the use of statistical methods. Mass valuation is most suitable for taxation.
The appraisal of individual properties is carried out by a small number of appraisers, the decision is made by one appraiser.
Cadastral and market valuation of land is carried out on the basis of the complex application of three types of methods: profitable, comparative and costly.
Land valuation methods:
Profitable:
direct capitalization;
capitalization of income by periods;
the remainder for the earth.
Comparative:
comparison of sales;
transfer.
Costly:
determination of development costs;
infrastructure cost estimates.
I... Profitable methods (or methods of future profitability).
Income-based land valuation methods are based on the expected income from land ownership. This approach is applicable to income-generating land plots. The market value of a land plot is the sum of the estimated future rental income or other benefits, as well as proceeds from the subsequent resale of the land, adjusted to the date of the assessment.
The cost of land is calculated using the formula:
Land value =
Depending on the purpose of the land plot as income can act:
Rent (for the valuation of agricultural and forest land);
Part of the income from the property complex attributable to the built-up land plot;
Rent (for the assessment of settlements);
Income from the increase in the value of a land plot received from its sale in the future.
Capitalization rate defined using three approaches:
1) the rate of Sberbank on long-term foreign currency deposits is used since investing in a land plot is one of the directions of the movement of money capital.
2) cumulative construction technique which takes into account risk-free rate (for example, interest rate Sberbank on foreign currency deposits), country risk (for example, for Moscow 3-6% is the minimum value for Russia), liquidity risk (the risk associated with the possibility of losses during the sale of a property due to insufficient development or instability of the market).
3m Market squeeze method (comparative sales analysis)... The capitalization rate is equal to the income divided by the selling price of the analogue property. It is advisable to calculate the average over several sales.
Remainder method for land flowing out of classical theory land economy, originally developed for agricultural land, which treats all income attributable to land as residual. In real estate appraisal practice, this method is used when buildings and structures have not yet been built (a feasibility study of new construction is being performed) or are relatively new.
II... Comparative (or analogue) methods.
Sales comparison method most suitable for evaluating vacant land plots. It is based on actual transaction prices for comparable parcels.
Evaluation can be carried out in two ways: by elements of comparison and using units of comparison. Comparison elements name the characteristics of land plots and the conditions for concluding transactions with them, which affect the value of the sale price. These elements include the following factors:
The composition of the assessed rights; terms of financing the transaction; terms of sale; market conditions (time of the transaction); location;
Zoning conditions and other restrictions; physical characteristics;
The availability of communications (transport accessibility, the presence or proximity of engineering networks, the conditions for connecting to them, etc.).
Comparison units - these are standard units for each market segment, for example, price for:
1 hectare (when selling large tracts of agricultural or forest land, for industrial use, when dividing land tracts into standard plots);
1 sq. meter (for the sale of land in city centers for commercial development);
1 frontal meter (when assessing land intended for commercial enterprises - the length along the street border);
Lot (price for land plots standard in shape and size in areas of mass development);
The unit of density.
In the case of applying this method, the appraiser first identifies a number of actual sales of land plots in the relevant real estate market, similar to the one assessed by the aggregate of indicators. The analogue properties are then corrected for differences between the target and each of the comparable sites (size, location, soil type, relief, economic conditions, etc.).
If there is not enough comparable sales in the area of the property being assessed, sales of plots of similar use with similar characteristics in neighboring regions are selected and adjustments are made for the difference in the significance of the territories.
The advantage of the method is its ease of use. The disadvantage is that comparative data are not always available, which is typical for the conditions of modern Russia.
Transfer or correlation method is based on the theoretical premise that for each type of land development, there is a certain proportion between the cost of land and the cost of buildings. The method is based on identifying the average ratio for certain types of real estate in a certain region and taking it into account in the assessment.
The matching method is advisable when there is an obvious insufficiency of comparable sales of vacant land plots. He is able to give acceptable results when analyzing sites with relatively new buildings, the cost of which can be determined using the cost method. As buildings age and wear and tear accumulate, the original ratio of land value to improvements (buildings) changes in favor of an increase in the share of land value.
III... Costly (or normative) methods.
Costly methods are based on the use of strict standards and imply an unambiguous assessment. At the same time, as a rule, the classical cost-based approach for the appraisal of land plots is not applied, but the principle of the cost model is used. Cost methods are used to determine the best and most efficient use of a land plot as free. They help to determine the market value of plots in the absence of data on completed transactions.
Withdrawal method determines the market value of the land plot itself as the difference between the market value of the entire property (land plot with buildings) and the cost of buildings.
This method is recommended by the RF Goskomzem for cadastral valuation of land plots, including industrial plots, to all constituent entities of the Russian Federation: residential buildings, summer cottages, cottages, garden houses, using the cost approach, which provides for the deduction of the replacement cost of the building less its depreciation ... from the total market price of the property ... ". Similarly, a mass valuation of land plots in Sweden is carried out.
Development Cost Method (or Plot Method) applies mainly to undeveloped land. It determines the total value of the land, which will be divided into separate land plots held for sale. All necessary development costs are deducted from the estimated cash proceeds from the sale of the plots. And thus the value of the undeveloped land is determined. As a rule, these are large non-standard land tracts, for which the issue of their rational long-term development is being resolved. The breakdown into plots corresponding to typical market sales conditions in a given area allows not only to substantiate the optimal development hypothesis, but also to assess the investment attractiveness of the entire land mass. Evaluation work consists in determining:
the size and number of plots, the requirements for their improvement, corresponding to the typical conditions of sales in the area;
sales prices of improved plots, turnaround times and expected proceeds from their sale;
the investor's costs for the development of sites and their subsequent sale, taking into account the expected profit from investments in improvements;
the present value of the land mass according to the expected net income, taking into account the return of the project and the frequency of receipt of funds.
Infrastructure Cost Estimating Method used for lands of settlements. It takes into account the cost of creating the engineering infrastructure of a city or village (construction of roads, underground utilities, etc.). Further, the share of costs attributable to the estimated land plot is highlighted.
Earth is the most important natural resource, the basis of life. And only for this reason it is invaluable. For many, the very formulation of the question of the price of land seems fundamentally unacceptable. Jean-Jacques Rousseau exclaimed: "... you are lost if you forget that the fruits of the earth are for everyone, but it is nobody's." And one of the most prominent thinkers and writers of the United States, Ralph Waldo Emerson, noted: "By purchasing land, you become the property of the land."
But people have been buying and selling land for a long time. And one of the vital needs of the existence of the land market is the valuation of land.
Land valuation concept
Assessment of the value of land makes it possible to translate the conversation about it into the "monetary" plane, to consider it as a commodity. Land appraisal is an appraisal of a piece of land, since it is land plots (ie, parts of the earth's surface, the boundaries of which are described and certified in the prescribed manner), and not land "in general", that are the subject of civil circulation.
When carrying out appraisal activities, several types of land value are used. Article 66 "Land Valuation" of the Land Code of the Russian Federation (RF LC) speaks of two types of value: market and cadastral. With regard to land plots, they also talk about investment value.
When determining the market value of a land plot, the most probable price is determined at which it can be alienated on the date of valuation in the open market in a competitive environment. In this case, the parties to the transaction act reasonably, having all the necessary information, and the value of the transaction price does not reflect any extraordinary circumstances.
When assessing the market value of a land plot, the intended purpose, permitted use, the rights to it of persons other than the owner are taken into account. With a change in any of these legal parameters, the market value of a land plot changes.
5.2.1. The main provisions of the assessment of land plots
As a means of production, land has features that have a direct impact on the valuation of real estate:
The land is not the result of prior labor;
- spatially limited;
- irreplaceable by other means of production;
- has a constant location;
- not wearing out when used correctly;
- geographically diverse;
- characterized by the specific usefulness of each specific land plot;
- has fertility and in agriculture all its useful qualities are used most effectively;
- in almost all spheres of human activity (except for agriculture and forestry) it acts mainly as a spatial operational basis, therefore it is inextricably linked with the objects located on it: buildings, structures, roads, reclamation structures, other material elements created by human labor, so-called improvements.
It is necessary to distinguish between the terms "land" and "land", which are used with different meanings. The term "land" is usually used when referring to undeveloped property. The term "land plot" means a part of the territory on which some work (improvement) has been carried out, allowing the use of this plot according to its intended purpose.
Highlight the following improvements , carried out to create a site:
External: arrangement of streets, sidewalks, drainage and engineering networks;
- internal: planning, landscaping, asphalting, the device of outlets for connecting engineering networks, communications, etc.
V Land Code RF contains the following definition of a land plot: "Land plot - part of the surface land, which has a fixed border, area, location, legal status and other characteristics reflected in the State Land Cadastre and documents of state registration of rights to land. Legal status the land plot includes: intended purpose, permitted use, form of legal ownership. The land plot can be divisible and indivisible. A land plot is recognized as indivisible, which, according to its intended purpose and permitted use, cannot be divided into independent land plots. "
Land valuation applies not only to vacant, undeveloped land. A typical real estate object consists of a land plot and buildings and there is a need to determine the value of the land plot separately from the improvements available on it, which is due to the following reasons:
Difference in taxation of land and buildings (property tax and land tax);
- a separate appraisal of the land plot is required from improvements when using the cost method for determining the value of real estate;
- making decisions on the demolition of existing improvements in order to better and most efficiently use the land plot.
The main element of land relations is land ownership.
When evaluating a land plot, it is necessary to take into account the set of rights associated with it. Common rights to be assessed:
1) full right property - the possibility of using a plot free from tenants by any in a legal way;
2) the right to lease - the possibility of owning a land plot under a lease agreement.
In accordance with the Law of the Russian Federation "On payment for land ”the use of land in our state is paid. The forms of payment in it are named: land tax, rent, standard price of land. Land tax is levied annually on all land owners, as well as landowners and land users, except for tenants. Rent is charged for leased land. The standard price of land is introduced for the purchase and redemption of land plots in cases stipulated by the legislation of the Russian Federation, to ensure economic regulation of land relations when transferring land into ownership, establishing collective shared ownership on land, inheritance, donation and obtaining a bank loan secured by a land plot.
In Russia, most land is not sold, but leased, so often appraisers determine not the cost of a land plot, but the cost of its lease rights.
Rental rights cost - this is the amount that a potential buyer is willing to pay for the right to own this land plot under a lease agreement in order to benefit from this ownership. Assessment of lease rights is used in determining the sale price of the right to lease a land plot, in determining the value of an object of which the leased land plot is a part, and in assessing damage from termination of a lease agreement.
5.2.2. Evaluation of mass and single objects of land ownership
There are three forms of land payment:
§ land tax,
§ rent,
§ standard price of land,
based on valuation land.
In the world appraisal practice, there are two types of assessing the value of land resources:
§ mass;
§ single
ny objects of land ownership.
Both types of valuation are systematic costing methods. In both cases, market analysis is necessary, but the fundamental difference lies in the scope and quality control of the assessment performed.
Models mass appraisal focused on reproduction
market for one or more land use options over a wide geographic area. Significant personnel are required to carry out a mass appraisal; development of a standard methodology capable of unifying the procedure for evaluating a large number of properties for a specific date; the use of statistical methods both in the assessment process and to check the quality of the assessment performed. Mass valuation is the best fit for taxation.
Evaluation of individual properties for a specific date is usually carried out by a small number of personnel, the decision is made by one specialist. The quality of the work performed is determined by comparing it with real sales of similar objects.
5.2.3. Analysis of the best and most efficient land use
When assessing a land plot, it is necessary to determine the option of its best and most effective use, which is determined by the interaction of a number of factors.
The analysis of the best use includes the study of alternative options for the use (development, development) of the land plot and the choice of the optimal one. This takes into account the prospects of the location, the state of market demand, the cost of development, the stability of the estimated income, etc.
When assessing the value of an object consisting of a land plot and buildings, great importance is attached to the analysis of the best use, firstly, of the alleged vacant land plot and, secondly, of the land plot with existing improvements.
The analysis of the alleged vacant land plot is a necessary step in determining its value, and it is based on the establishment of the most profitable option for the use of the land.
Analysis of a land plot with existing improvements involves making a decision on the demolition, modernization or preservation of the improvements available on the land plot in order to ensure the maximum profitability of the object.
The probable and most profitable use of the site provides its highest value. Use cases must be legal, physically acceptable, and cost effective.
Let's name the main factors that determine the optimal use of land:
1) location - a factor that has a major impact on the value of a land plot (taking into account the prospects of the location, transport accessibility, the nature of the environment);
2) market demand - a factor that reflects the ratio of supply and demand in the market;
3) financial feasibility - the ability of the project to provide income from the use of the land plot, which would be sufficient to reimburse the costs of investors and ensure the receipt of the expected profit;
4) physical suitability of the site - the prospect of creating improvements - size, topography, soil quality, climate, geotechnical and hydrogeological characteristics of the site, existing zoning, environmental parameters, etc .;
5) technological feasibility and physical feasibility - analysis of the ratio of quality, costs and timing of the project, the likelihood natural Disasters, the availability of transport, the ability to connect to utilities, taking into account the size and shape of the site, for example, the size may be small for the construction of an industrial facility;
6) legislative (legal) admissibility - compliance of the option of using the land plot with the current legislation. It is revealed as a result of an analysis of building, environmental standards, restrictions on the number of storeys, the presence of temporary bans on construction in a given place, difficulties in the area of historical urban development, a possible change in regulations, observance of zoning rules, negative moods of the local population;
7) maximum yield (maximum property income and the cost of the plot), which is determined by discounting the future income of alternative use cases, taking into account the investment risk.
5.2.4. Improving the efficiency of urban land use
Urban lands are a special category. Their value is influenced by the size of the city and its production and economic potential, the level of development of engineering and social infrastructure, regional natural, environmental and other factors. In addition, there are specific features of the legislation for this category of land.
The same factors can affect the value of a particular site. opposite influence:
Heavy traffic is undesirable for a residential area, but increases the value of the site for trade purposes;
- placement relatively educational institutions and shopping centers, aesthetic advantages and amenities taken into account when assessing land for housing, practically do not affect the value of territories focused on industrial development; transport infrastructure and economic zoning are important for them.
In the previously functioning planned economy With the priorities of industrial development, the command-administrative distribution of "free" land led to serious disparities in the development of the city and wasteful, unnecessary and even harmful for the city use of the most valuable urban land (including by enterprises and organizations), often leading to serious environmental problems. Once allocated, land is practically not redistributed, which leads to a further exacerbation of negative trends.
The main used units of comparison of land parcels:
Price for 1 hectare - for large tracts of agricultural, industrial use or housing construction;
- price for 1 m 2 - in business centers of cities, for offices, shops;
- price for 1 frontal meter - for commercial use of land in cities. In this case, the cost of the site is proportional to the length of its border along the street or highway at the standard depth of the site, which accounts for a small part of the cost;
- price per lot - it is used to compare plots that are standard in shape and size in residential and suburban areas;
- price per density unit - the ratio of the building area to the area of the land plot, etc.
Most of the land resources are currently in state and municipal ownership. Practice shows that in market conditions, urban land is a valuable resource and can serve as a stable source of income. local budget... The city authorities determine the amount of land tax, the lease rate for land and the standard price of a land plot upon redemption, therefore, the issue of increasing the efficiency of land use is relevant for them. For land ownership to be used more efficiently, that is, to bring maximum income from use and to improve the overall investment climate, further development of market relations in the land market, focus on the current market situation and market requirements are necessary.
In order for land ownership to be used more efficiently, that is, to bring maximum income from use and contribute to an improvement in the overall investment climate, first of all, it is necessary to implement the processes of taxation, lease and redemption of urban land on the basis of its market value. At the same time, a fair distribution of the tax burden is achieved, stimulation of effective use and activation of investments in reconstruction and development in the process of restructuring the territory.
The results of the assessment of the urban area serve as initial information for solving the following tasks:
§ development of urban planning policy and social planning;
§ formation of proposals for the types of functional use of the territory, taking into account its quality;
§ formation of economic mechanisms for the placement of various options for land use and investment and construction policy;
§ analysis of the consequences of options for the development and restructuring of the urban environment, optimization of municipal investments in the maintenance and development of the urban environment;
§ definition investment attractiveness territory as a function of the value of urban land.
There are two views on the value of urban land:
City planner in the process of functional zoning of the territory as a section of the master plan of the city;
- an appraiser in the process of developing a cadastral valuation of land.
The basis for the formation of the cadastral valuation of land and the functional zoning of the territory should be a comprehensive urban planning assessment of the market value.
5.2.5. Land valuation methods
Normative method is to determine the standard price of land. It is used in the transfer, redemption of land into ownership, the establishment of a common joint (shared) property in excess of the free rate, inheritance or donation, obtaining a loan secured, seizure for state or public needs.
Lands of cities are assessed taking into account the density of building, the prestige of the area, the nature of the surrounding land use, ecological state, engineering and transport facilities, etc. Lands are divided into zones differentiated by the base rates of land tax and the normative price of land (RF Law "On payment for land") ... The standard price of land is recorded in the Land Registry.
The basis for determining the standard price of land:
land tax rates and multiplying factors, incentives for land tax not taken into account.
It is often necessary to evaluate an object consisting of a building and a land plot, when the latter has only lease rights. In this case, the cost of allocating a land plot for construction can be taken into account as the value of the land.
In market conditions, when the necessary information is available, it is advisable to apply methods based on the analysis of market data. The Order of the Ministry of Property of Russia dated 07.03.2002 No. 568-r approved Methodological Recommendations for determining the market value of land plots. As a rule, when assessing the market value of land plots, the method of comparison of sales, the method of allocation, the method of capitalization of land rent, the method of distribution, the method of remainder, and the method of division into plots are used.
Sales comparison method is the simplest and most effective valuation method, can be used to assess both actually vacant and presumably vacant land; allows you to determine the specific price of a land plot by making percentage adjustments to the sales prices of analogues. In the absence of information on the prices of transactions with land plots, the use of supply (demand) prices is allowed.
Common elements of comparison for land plots: property rights, financing conditions, special conditions of sale, market conditions (change over time), location (distance from the city and roads, characteristics of the environment), zoning conditions, physical characteristics (size, shape and depth of the plot, angular arrangement, soil type, relief), available utilities, economic characteristics, the best and most efficient use. When valuing land, you can use several units of comparison, adjusting the price of each of them and getting at the end several values of the value that define the value range. Urban lands are a special category, their value is influenced by the size of the city and its production and economic potential, the level of development of engineering and social infrastructure, regional natural, environmental and other factors.
The method gives sufficiently accurate results only on a developed information-open competitive market... The Russian land market does not meet these requirements, the value of a land plot cannot be determined based on information on sales transactions for analogous plots. Therefore, for the assessment, all available information should be collected to apply all site assessment methods.
Land rent capitalization method is based on the fact that if there is sufficient information about the lease rates for land plots, it is possible to determine the value of these plots as present value future income in the form of rent for the assessed land plot. Under this method, the amount of land rent can be calculated as income from the lease of a land plot under the conditions prevailing in the land market. As a regular stream of income, land rents can be capitalized into value by dividing by the land capitalization ratio determined from market analysis. The initial data for capitalization is obtained from a comparison of sales of leased land and rental values.
Based on the received rental rate, the market value of the plot is determined using the income approach, usually using the direct capitalization method. The formula for calculating the cost of a land plot is:
VL - the cost of the land,
IL - income from land ownership,
R L: - capitalization rate for land.
The capitalization rate is determined by dividing the amount of land rent for similar land plots by the price of their sale or by increasing the risk-free rate of return on capital by the amount of the risk premium associated with capital investment in the land plot being evaluated.
The main factors affecting the rental rate of a land plot are: location characteristics, size, shape, surrounding land use type, transport accessibility, engineering equipment.
However, in Russia, land is mainly leased from the state and municipal fund, and the amount of rent is calculated in accordance with the standard price of land, which is not equivalent to its market value. At present, attempts are being made to lease land at its market value, but it is too early to talk about the objectivity of the results. practical application method of capitalization of land rent.
Distribution method(method of correlation, correlation, allocation) - determination of the component of the value of the land plot on the basis of the known ratio of the value of the land and improvements in the property complex. The method is based on the principle of contribution and the assertion that for each type of property there is a normal ratio between the value of land and buildings. This ratio is most reliable for new buildings, they are close to the option of the best and most effective use. The older the buildings are, the greater the ratio of land value to total property value.
To apply the method, reliable statistical data on the ratio of the values of land and all property of a particular type of real estate in a given market are required. However, the method is rarely used, even in developed markets, as it has low reliability. The application of the method is justified in the context of insufficient information on the sale of land plots. The values obtained are considered indicative.
Allocation (extraction) method it is used for the assessment of built-up land plots if there is information about the prices of transactions with similar real estate objects. Improvements to the land plot correspond to its most efficient use. The method assumes the following sequence of actions:
Definition of object comparison elements;
- determination of the differences between each analogue and the object of assessment;
- calculation and making adjustments for each of the comparison elements;
- calculation of the market value of a single real estate object, including the assessed land plot, by reasoned generalization of the adjusted prices of analogs;
- calculation of the cost of replacement or the cost of reproduction of improvements of the estimated land plot;
- calculation of the market value of the appraised land plot by subtracting from the market value of a single real estate object, which includes the appraised land plot, the replacement cost or the cost of reproduction of improvements to the land plot.
The allocation method is used when the contribution of improvements to the total price of the plot is small, it is recommended for evaluating suburban areas (for which the contribution of improvements is small and fairly easy to determine), it is used in the absence of data on the sale of a land plot in the vicinity.
The method is the most effective in a passive market (there is no data on the sale of free land plots), taking into account the peculiarities of the initial information and the model for obtaining the desired value. The cost of a land plot in general is determined by the formula:
Сз, - the cost of the land plot,
С - the cost of the object,
Su is the cost of upgrades.
Remainder method based on investment group technique for physical components. The method is used for the assessment of built-up and undeveloped plots, if there is a possibility of building up the assessed land plot with income-generating improvements. The value of land is determined by capitalizing the portion of income attributable to land.
To determine the value of a land plot, you need to know the value of the building, the net operating income of the entire property, the capitalization ratios for land and for buildings.
The main steps of the residual method for land are:
1) the net operating income of the entire property is determined based on market rent and estimated operating costs;
2) the net operating income related to the structure (building) is determined;
3) net operating income attributable to land plot, is capitalized into a measure of value through the capitalization rate for the land.
It is difficult to predict income in the context of insufficient economic stability.
Parcel method(developmental approach) is used in assessing land suitable for subdivision into individual parcels. Consists of the following steps:
Determination of the size and number of individual plots;
- calculating the cost of developed areas using the comparable sales comparison method;
- calculation of costs and schedule of development of the expected sale period and reasonable entrepreneurial profit;
- deduction of all development costs and business profit from the estimated total sale price of land plots to determine the net proceeds from the sale of real estate after the completion of the development and sale of individual land plots;
- selection of a discount rate that reflects the risk associated with the period of the proposed development and sale.
Land development costs typically include:
Breakdown, clearance and leveling costs;
- expenses for the construction of roads, sidewalks, engineering networks, drainage;
- taxes, insurance, engineering and technical staff fees;
- marketing expenses;
- contractor's profits and overheads, etc.
In general, the modeling of the market value of land plots is carried out under the assumption of achieving dynamic equilibrium in the competition of various “rational” land users for the right to occupy a certain plot. With a balance of effective demand and supply on the simulated land market with limited supply, the issue of the most efficient use of the site as free and taking into account the existing development is resolved. Modeling of potential rental income for various types of land use is based on the patterns of formation of rental effects of location and prevailing prices (sales and rent). Taking into account the significant difference in cost indicators for sites located along the front of the city's road network and located in intra-quarter territories, these sites are subject to mandatory separation when assessing. The implementation of the principle of the most efficient use takes place in conditions of competition for the use of real estate between different functional market segments, taking into account real restrictions on the volume of demand and the possible multifunctionality of the territory, as a result of which a set of land users is formed at each site.
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