Property Calculation

Property calculations by the method of asset valuation approach.
Using the method of calculation of costs, value of the property (land and building) is obtained by assuming the land as vacant land, land value is calculated using the ratio of market data (the data market approach). While building value calculated by the method of cost calculation. The market value is calculated by calculating the cost of building a new reproduction (RCN) of the building at the time of valuation less depreciation.

General formula:
Land Property value = value + (Reproduction Cost New (RCN)-Depreciation)

The necessary steps:
► Calculate the value of the land to the market data comparison, assuming the land as vacant and available to be developed in accordance with the principle of Highest and Best Use
► Calculate the cost of a new realization of buildings and infrastructure
► Calculate all depreciation by all causes (physical, functional and economical)
► Reduce the cost of a new realization of the magnitude of depreciation of the market value will be building
► The market value of the land plus building market value equal to the value of the property by the cost approach method.

Calculating the Replacement Cost New (Replacement Cost New)
In calculating the cost of a new replacement there are 4 kinds of methods can be used, ie

1. Quantity survey method
In applying this method, the property appraiser shall obtain data:
(1) direct costs, such as land preparation costs, material costs, and labor costs;
(2) indirect costs, including survey costs, licensing costs, insurance costs, other costs (overhead costs), profits, and taxes, and
(3) unit price is used, covering the cost of materials and labor costs;
Methods mounted unit (unit inplace method)

In using this method Mounted Unit (Unit In Place Method), Property Appraiser shall calculate the estimated cost of building or construction units installed by unit price
Methode square meter (square meter method)

In using the method Square Meter (Square Meter Method), Property Appraiser shall:
(1) calculate the estimated cost of development with respect to the contract price or cost of construction of comparable properties that are comparable and similar newly completed within a maximum period of one year from the date Rating (Cut Off Date).

(2) make adjustments to the comparable property data are comparable and similar, in case there are significant differences between the data objects and properties comparable assessments are comparable and similar which can affect value.

(3) adjusting the estimated cost of construction of the development trend of changes in the cost of the contract or the date on construction as Date Rating (Cut Off Date), and

(4) calculate the estimated cost of construction that can be drawn from the comparison property development costs and similar or comparable to the cost of building a new property completed within a maximum period of one year before the date Rating (Cut Off Date), in terms of the cost of construction on contract or the date of construction is unknown, they meet the following requirements:

-Comparison property are comparable and similar fulfill the principle of highest and best use (highest and best use);
-Comparison property are comparable and similar in stable market conditions, and
-The value of the location (site value) of the property that is comparable and similar comparison can be known.

2. Index method costs
In using this method Cost Index (Index Cost Method), Property Appraiser shall multiply the cost of comparable properties that are comparable and similar to certain cost index to an estimated construction cost of the valuation object.

Calculate Building Depreciation / Depreciation
Depreciation is the reduction in the value of the cost of the new creation. In assessing the approach Costing (Cost Approach), required a fairly significant step, which estimates the amount of depreciation or depreciation of buildings in order to obtain the market value of the building or the market value of the subject property.

Depreciation of buildings is not only influenced by the age of the building, but also the state of the building, although the building in a state of 100% new. Because the assessment we set the value of the building is not the cost of building a new building. Remember that the cost of constructing a building is not the same as the value of the building. The building will have value if the building has a purpose for humans.

In calculating depreciation, there are 3 kinds of methods can be used. 3 Piece Depreciation / Depreciation of buildings, namely:

Market extraction method
Market extraction method can only be used if:
(1) the selling price of comparable properties that originate from the association assessors available;
(2) comparison property used shall have comparable or similar criteria, and
(3) calculation of the value of land and / or Cost New Reproduction (Reproduction CostNew) or Replacement Cost New (Replacement Cost New) on the property to do an accurate comparison.

Depreciation calculation procedure using market extraction method is:
(1) obtaining data transaction or offer a comparison of the association property appraiser;
(2) make adjustments or transaction data offer comparable properties;
(3) calculate the value of comparable properties that have depreciated (depreciated cost of improvements) for the property consisting of land and buildings and other infrastructure is done by subtracting the data comparable transactions or property deals with properties comparable land values;
(4) calculate the cost of a New Reproduction (Reproduction CostNew) or Replacement Cost New (Replacement Cost New) comparison property;
(5) to calculate depreciation by subtracting Cost New Reproduction (Reproduction CostNew) or Replacement Cost New (Replacement Cost New) comparison property with comparable property values ​​have depreciated, and
(6) converts depreciation as a percentage by dividing depreciation Reproduction Cost New (Reproduction CostNew) or Replacement Cost New (Replacement Cost New) comparison property.

3. Age Economical Methods
In calculating depreciation using the method
economic life, Property Appraiser must first
obtain the following data:
(1) the actual age of the property by way of calculating the number of years since the property was completed established or made until the date of judgment.

(2) aged effectively by adjusting the actual age based on the condition and use of the property, or the remaining economic life of the property in a way to estimate the remaining useful life remaining before the property can not be used or operated economically.

(3) the economic life (economic life) or the estimated useful life (useful life) by calculating the number of years since the property is established or made up with time estimates the property can not be used or operated economically.

Depreciation calculation procedure using the method of economic life are:
(1) determine the economic life and effective age assessment objects, and
(2) determining the depreciation as a percentage by dividing the effective age of an object with the economic life assessment.

4. Breakdown Method
In the method of breakdown, depreciation grouped into
three main parts:
(1). Physical damage (physcal deterioration)
eg damaged, decayed, cracked, hardened or structural damage

Depreciation calculation procedure based on physical deterioration (physical deterioration), among others:
(A) physical deterioration (physical deterioration) that can not be repaired (incurable) is based on the age factor, calculated by dividing the effective age of the economic life, or
(B) physical deterioration (physical deterioration) that can be improved (curable) based on the visible condition factor, calculated by estimating the amount of the cost of necessary repairs.

The general formula to calculate depreciation / depreciation resulting from physical damage
Physical Depreciation = (effective age / life benefits) X 100%

(2). Functional obsolescence (functional obsolescence)
for example, poor planning, imbalance related to the size, model, shape, age and other

The calculation of depreciation due to functional obsolescence (functional obsolescence) is done by calculating the amount of the estimated costs necessary to make the object function with optimum judgment or estimate of operational inefficiencies.

The general formula to calculate depreciation / depreciation resulting from functional decline:
Functional deterioration of functional decline =% x (100% -% physical depreciation)

(3). Economic obsolescence (economic obsolescence)
example of social change, government regulations and other regulations that restrict the designation and others.

The calculation of depreciation due to obsolescence of economic (economic obsolescence) is done by considering
things, among others:
(A) the subject matter of assessment can be sold, then the ratio is calculated from the value of the sales price at the time before the economic obsolescence (economic obsolescence) with the aftermath of the current economic obsolescence (economic obsolescence).

(B) in the case of a commercial property appraisal objects, it is calculated from the amount of income drop objects with respect to assessment of the cause of the decline in revenue, and

(C) the subject matter of industrial property assessment is then calculated from the magnitude of the decline in production object of judgment with respect to the causes of the decline in production.

The general formula to calculate depreciation / depreciation resulting from economic obsolescence
Economic obsolescence economic obsolescence =% x (100% -% physical depreciation)