Property Values

Principles - Basic Principles of Property Valuation (Assets)
In conducting the assessment are fundamental principles that need to be considered before issuing an opinion the value of the property. The basic principles in the valuation of assets are as follows:

Highest and Best Use Principle
Is the best use that generate revenue (income) is optimal from a property. Example: a luxurious house built luxury housing complex will generate maximum value. While luxury homes built in the slums has a value lower than the built luxury housing complex.

A property is said hbu (Highest and Best Use), if it meets four criteria:
In Legal Permitted
Physically Possible
In Financial Worth
Giving Maximum Benefits

Substitute Principle (Substitution)
In principle, people will not pay more for the same property as long as there is a replacement property. Example: In principle, people would prefer to buy the property at a lower price on the same property conditions. Properties in a series where the same conditions, the lowest property value will be quickly sold.

Demand and Supply (Supply and Demand principle)
The value of a property is determined by the balance between demand and supply. The higher the demand and supply is less, then property values ​​tend to rise and instead offers a lot with a little query result property values ​​down.

Principles of Conformity (Comformity)
The value of a property will be maximized if the appropriate environment. Examples: luxury homes will provide maximum value, when the mansion was built in the complex. Rather its value will go down if built in a seedy neighborhood.

Principles of Change (Change)
Changes to the factors may affect the value of a property. These changes can include changes in government policy, changes in the environment (eg suddenly constructed landfills), the market, including regulatory laws, zoning (designation) and urban development.

Principle of Anticipation (Anticipation)
Hopes for profit or non profit in the future will affect the price of a property. Example: Due to the flood mud from the mining area, properties in surrounding areas sludge disaster is expected to rise due to a lack of understanding in the area around the mud in the future will be complex when mining is complete mud. Another example is the planned construction of a ring road in the city to make the price of land along the ring road plan will be increased.

Principles of Competition (Competition)
In general, the higher the competition, then the property value will likely down due to the many choices. Example: As a result of the real estate business providing high profits, many other developers who build properties and cause property values ​​to fall.

Principles Addition and Subtraction (Increasing and Decreasing Return)
Basically, the addition of the ornaments on the property does not necessarily increase the value of the property. Example: the addition of a statue on a property could result in reduced property values, if offered in the market because not all people like the statue. It may be that the addition of the statue actually reduce property values.

Principle of Contribution (Contribution)
Both land and buildings contribute to the total value of the property. Example: The old building that stood on the land Commercial land can be said to contribute to the whole value of the property.

Principle of Balance (Balance)
The value of a property will reach a maximum when the factors of production associated with the property are in balance. The factors of production include: labor, capital, raw materials etc.. Example: Building industry in areas far from the raw materials could cause the value of the property has declined due consideration the transportation costs for raw materials.