Commercial Real Estate Appraisal in Dubai

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Commercial Real Estate Appraisal in Dubai
Commercial real estate appraisal is a combination
of art and science. Knowledgeable appraisers
gather and analyze data prior to making
informed decisions about real estate value.
The appraisal profession has developed a
series of well-established analytical
techniques the cost approach, income
approach and sales comparison approach. The
most appropriate approaches depend upon the
characteristics of the subject property.
The cost approach is considered most
applicable for commercial real estate
appraisals for relatively new properties and
special-use properties. Commercial real estate
appraisers are less likely to use the cost
approach for older properties due to the
difficulty of precisely calculating the amount of
depreciation. The income approach is
considered most applicable for investment or
income properties. Appraisers gather data
regarding the actual income and expenses for the
subject property, rental comparables, expense
comparables, industry expense data, market
occupancy, and rental market trends. The
commercial real estate appraiser then estimates
gross potential income, other income,
effective gross income, operating expenses,
and net operating income. Net operating income
is converted into an indication of market value
using a conversion factor termed the
capitalization rate, using the following
formula Market value net operating
income/capitalization rate. This process is
termed direct capitalization.
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The income approach can also be calculated using
a discounted cash flow analysis. Revenue and
expenses are estimated for a period of years and
the resulting annual cash flows and gross
proceeds from a projected sale of the property
are discounted to a present value using a
discount rate. Commercial real estate
appraisers in Dub ai also utilize the sales
comparison approach to estimate market
value. The sales comparison approach is
often considered most comparable for
owner-occupied properties. After obtaining
data regarding similar properties that recently
sold, the appraiser makes adjustments to generate
an indication of market value for the subject
property. After considering each of the
three approaches to appraisal and preparing
an analysis for the approaches which are
considered relevant, the appraiser reconciles the
indications of value to a final value conclusion.
The quality and quantity of data for each of the
approaches is considered when reconciling to a
final value conclusion. If you are looking
for Commercial Real Estate Appraisal in
Dubai Milton Brooks Valuation offer uniquely
informed perspectives on real estate
valuations and consulting. Article Source -
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