Valuation of Residential And Commercial Property-Case Study On Residential Apartment At Chalisgaon

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056

Volume: 09 Issue: 08 | Aug 2022 www.irjet.net p-ISSN: 2395-0072

Valuation of Residential And Commercial Property-Case Study On Residential Apartment At Chalisgaon

L. Naktode3

Student, M.E, Department Of Civil Engineering School Of Engineering And Technology Sandip University Mahiravani, Nashik- 422 213 1 Professor, Department Of Civil Engineering School Of Engineering and Technology Sandip University Mahiravani, Nashik- 422 2132 , 3 ***

Abstract The analytical process of determining the current value of an asset such as residential, commercial, industrial, or agricultural land is known as appraisal. The value is determined by the selling price as well as the potentialrentorincome.Thegoalofthisresearchistoget people acquainted with the general field practice of real estatevaluation.Thepurposeofthisstudyistodetermine the market value of properties for bank financing in Chalisgaon, Dist Jalgaon (Maharashtra), India, located in urban,semi-urban,andruralareas

Keyword: Valuation, Market survey, Residential, Commercial,sellingprice

1. INTRODUCTION

The process of evaluating the market worth of real estate is known as valuation. The value of a property is determinedbyfactorssuchasstructure,age,maintenance, location, and so on. Valuation is done mostly for financial operations in the economy, such as investments, buying andselling,loansandmortgages,andsoforth.

The practise of evaluating the cost of a property based on its existing condition is known as appraisal. Immovable properties include land, buildings, mines, trees, quarries, and so on, while mobile properties include coal, oil, steel, cement,sand,andsoon.

Property valuations are often performed by an estate agent or independent valuer acting on the seller's or financing institution's instructions. In addition to structural surveys to examine the physical state of a property, buyers might request a property valuation if theyareconsideringpurchasingone.Beforeamortgageor refinancing, a lending institution (such as a bank) may request a value to secure the loan. The collateral value of the property may cover it. This provides them the confidence to lend cash since they know that if the mortgage is not paid, they may reclaim any lost funds by flippingtheproperty

1.1. Aim of Study

Determiningthefairpriceorworthofapropertysuchasa building, factory, other forms of engineering buildings, land, etc. A property's current worth is established by appraisal. A property's present value might be judged by itssalepriceortherevenueorrentitcangenerate.

1.2 The important factors influencing the value of building

Typeofthebuilding

Locationofthebuilding

Expectedlifeofthebuilding

Sizeandshapeofthebuilding

ThePresentconditionofthebuilding

Legalcontrolofthebuilding

1.3

Purposes of valuation

BuyingorSellingProperty

Propertyappraisalisessentialwhenbuyingorsellinga home

Taxation

Aproperty'svaluationisrequiredinordertoassessitstax. Municipaltaxes,wealthtaxes,propertytaxes,andsoon areallbasedonthevalueoftheproperty

RentFunction

A valuation is required to determine a property's rent. Rent is normally fixed at a certain proportion of the valuation,whichrangesfrom6%to10%ofthevaluation

Namdeo Bhagwat Kumavat1 Dr. Nitin Bharadiya2 Dr. P.



International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056

Volume: 09 Issue: 08 | Aug 2022 www.irjet.net p-ISSN: 2395-0072

SecurityofloansorMortgage

Property value is essential when loans are taken out againstitassecurity.

Compulsoryacquisition

When a property is acquired by law, the owner is compensated. The property must be valued in order to establishtheamountofcompensation

2. STATE OF DEVELOPMENT

D. Krishnaraja discusses waysforpricingdifferentlevels of a building in November (2013). The depreciation of a building with several levels erected at various times must be examined differently than the standard technique. The standard technique includes two formulas: the straight linemethodandthedecreasingbalancemethod.Thisform of depreciation computation based on the age of the building as a whole does not account for the increasing value of the upper floor remains because they are either neweroryoungerthanthegroundfloor.

Khazan Chandra (2015) describes the calculation of building costs using CPWD plinth area rates. Construction cost evaluation refers to the appraisal of investment costs in a structure. This is often required by the financial institution's income tax department to be compared with the investments that the owner presents in his account, andoccasionallyforotherreasonssuchasfamilyconflicts orother reasons.The buildingexpensesshouldthusbe as neartotherealpricesasfeasible.Theauthordiscussesthe valuationofinvestmentexpensesforincometaxpurposes inthisarticle.

The goal of this investigation, according to Abhishek Golcha et al. (2016), wastoevaluatethe market value of buildingsforbankfinancingreasonsinChhattisgarh,India, in urban, semi-urban, and rural locations. This analysis assists the bank in determining the true state of the buildingandsimplifiesthebank'sfinancingamounttothe property owner. A property valuation informs both the property owner and the bank of the property's genuine value.

According to Sneha Sudhir Mokalkar (2017), the purpose of this article was to investigate the current rate changes for commercial properties in various locations of Pune, India, as well as the variables influencing commercial property valuation. Commercial property is defined as income-generating property. Many research have been conducted to examine the valuation criteria of commercial real estate that influence its value. This study

notonlyidentifiestheelementsimpactingcommercialreal estate value, but it also identifies the zones or places in Punethathavewitnesseda significantshiftincommercial real estate value trend. This research would assist a potential buyer in making the optimal buying selection in ordertomaximizefutureprofits.

3. METHODOLOGY

Thefollowingmethodologyisadopted 

Gatheringallnecessaryplansanddrawings 

Visit the property being valued and the property beingcompared. 

UseofLandandBuildingMethods

UseoftheRentalIncometechnique.

UseoftheCompositeRateMethod

TheMethodsofValuation.

A.Plinthareamethod

B.Depreciationratemethod

C.Rentalmethod

D.Landandbuildingmethod

E.Developmentmethod

4.

CASE STUDY

4.1 Case Study I - Example of Residential Apartment at Chalisgaon

Table1BasicDetails

Applicant sName Mr.Gaurav Rajendra Chaudhari

Nameof Owners Mr.Gaurav Rajendra Chaudhari

Typeof property Residential Current usage Residential

Property / SiteAddressChaudhari’s Apt., Devkar Mala, Near Deore Hospital, Captain Corner,Bhadgaon Road,Chalisgaon-424101

Address as per Docs Chaudhari’s Apt., Devkar Mala, Near Deore Hospital, Captain Corner,Bhadgaon Road,Chalisgaon-424101



International Research Journal of Engineering and Technology

(IRJET)

e-ISSN: 2395-0056

Volume: 09 Issue: 08 | Aug 2022 www.irjet.net p-ISSN: 2395-0072

Table2Surrounding&LocalityDetails

Zoningasper MasterPlan/ Developmentplan

Classoflocality (High/Middle Class/Lower/ Negative)

Residential Proximity fromcivic amenities /public transport

Middle Class Nearest Railway Station

Nearby

Noof Blocks/Wi ngs

Nashik Railway Station

Site(Developed under-developed) Developed Nearest BusStop CBS Bus Stop

NearestLandmark Deore Hospital Distance fromCity Centre

Conditionand width ofapproach road:-

Good Condition &itis7.5 Mt.Wide Road

Table3PropertyDetails

2.1Km

Noof Unitsper floor

Ft.)

1 No.of Floors G+3

2 No.of Lifts 1

Amenities NA Unit details Locatedon FloorNo. 3rdFloor No.of Rooms/ Unit configura tion

Remarks onview from property

Brief descri ption ofthe proper ty

Intern alvisit done

Chaudhari’sApt.,DevkarMala,NearDeore Hospital,CaptainCorner,Bhadgaon Road,Chalisgaon-424101

Yes

Occup ant Vacant/Oc cupied Vacant Nameof Occupant Mr.Chau dhari

2BHK

ResidentialDevelopment Table4Valuation

Area Details

LandArea (Sq.Mt.) MarketRate(perSq. Ft.) TotalValueof Property 3229.2 Rs.3500/- Rs.1,13,02,200 /-

InWords INR.OneCroreThirteenLakhTwo ThousandAndTwoHundredRupeesOnly.

A1:Value of Land (ApplicableforVilla/Bungalow/Row House/Industrial,VacantLand/Residential Flat) Value of Land + Construction in Rs. (A1) NA

Table5ComparisonMethod

A2. Comparison Method

Relation with applicant

Property Demarcate d

Self Self/ Tenant/ anyother

Self Buildin g details

Yes Property Identified through

Mr.Chau dhari

Typeof structure RCC Land/Plot Area(Sq. 3229.2

Carpet Area NA Loading in% NA Saleable area 5,330.87Sq.Ft. Rate perSq. Mt.

Rs.1,06,61,740/-

Rs.2000/Total Valueof Property

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056

Volume: 09 Issue: 08 | Aug 2022 www.irjet.net p-ISSN: 2395-0072

In Words INR.OneCroreSixLakhSixty-OneThousand SevenHundredandFortyRupeesOnly.

Noof car parks

Ratepercar parking Valueofcarpark

NA NA NA

OtherchargesinRs.(LumpSum) NA

Total Amenities charges (B) NA

Total Fair Market Value of the property: - A1 or (A2 + B) Rs.2,19,63,940 /-

Total Value of Property Rs.2,19,63,940 /-

In Words INR.TwoCroreNineteenLakhSixty-Three ThousandNineHundredandFortyRupees Only.

Realizable Value Rs. 1,75,71,152/-

Forced Sale Value / Distress Value (75%) Rs. 1,64,72,955/-

Ready Reckoner rate / Circle rate (per Sq. Ft.) Rs.1800/-

Property Value as per Ready Reckoner/Circle Rate Rs.95,95,566 /-

Insurance value /Re-constructioncost NA

Approx.Rentalsincaseof100% completeproperty NA

Supportingexplanationincase differencebetweenFMVandReckoner Rateis>20%

5. CONCLUSION

As a result of this research, we now understand how real estate appraisal is done in practise. Because the property is used as collateral for the loans, it is critical that the moneylendinginstitutionsunderstandthegenuinemarket value of the collateral pledged for the mortgage. Real estate appraisers are responsible for determining the marketvalueofrealestate.Financialinstitutionsshouldbe familiarwiththebasicvaluationproceduresaswellasthe languageusedintheValuationReport.

We discovered that we perform building valuations. This fair market value can be employed by a financial institution, a bank, or an appraiser. For bank financing purposes, financial institutions will know the real state of the building, the county registrar will know the worth of the building at the time of sale, and the owner may also knowthecurrentmarketpositionofhisproperty.

6. REFRENCES

[1] 1. Abhishekh Golcha and S. S. Pimplikar, ”Valuation Of Multi Storied Building For Bank FinancePurpose”Vol.03Issue05,May2016.

[2] 2. Sneha Sudhir Mokalkar, ”Study Of Commercial Property Valuation “ Vol. 03 , Issue 09, March 2017.

[3] 3. Minal Chaudhari, “valuation of residential and commercialbuilding–casestudy”,vol.67issue1, January2019.

[4] 4. Tanujparmarandhirenmori,“identificationof methodology used in real estate property valuation”,vol.05,issue02,feb2018.

[5] 5. Brijesh N. Panchal, “Valuation of Real Estate” PVAIVPO.

[6] 6. N.K.Rajkumar 2015, „VALUATION OF PARTITION PROPERTY‟, Indian Valuer, Volume XLVII,Pg.No.549,April24,2015.

[7] 7. A.M. Abrahim 2015, „Valuation of Godowns‟, Indian Valuer, Volume XLVII, Pg. No. 273, Feb 24, 2015.

[8] 8. HarishTahilramani2015,„Variationsinvalues of commercial properties during 2001 to 2010-A case study at Sayajigunj, Vadodara, Gujarat‟, Indian Valuer, Volume XLVII, Pg. No. 163, Jan 24, 2015.

[9] 9. G. S. Mittal 2015, „Identification and inspection of open land properties for valuation.‟ IndianValuer,VolumeXLVII,Pg.No.546,April24, 2015.

[10] 10. Satish Kotagiri 2014, „Case study of a shopping mall project- Useful to valuers.‟ Indian Valuer,VolumeXLVI,Pg.No.1195,Sep24,2014.

[11] 11. P. Butler (1915): "Valuation of Railway PropertyforPurposesofRateRegulation",Journal ofPoliticalEconomy,Vol.23,No.1(Jan.,1915),

International Research Journal of Engineering and Technology (IRJET) e-ISSN: 2395-0056

Volume: 09 Issue: 08 | Aug 2022 www.irjet.net p-ISSN: 2395-0072

[12] 12. R.A.Brealey,I.A.Cooper,M.A.Habib(1997) Investment Appraisal in the Public Sector, OXFORDREVIEWOFECONOMICPOLICY,VOL.13, NO.4

[13] 13. H. Kato (2013): Valuation of Urban Rail Servic:e Experiences from Tokyo, Japan, Prepared after the Roundtable on Valuing Convenience in PublicTransport,(12-13September2013,Paris)

[14] 14. G. Hales, G. Jordan (2012): Roads Alliance Valuation Project Discussion Paper 1 – Valuation Stereotypes - Lemmah Pty Ltd., 45 Freesia Street, MACGREGORQLD4109

[15] 15. THE GREEN BOOK - Appraisal and EvaluationinCentralGovernment,2011,Treasury Guidance,LONDON

[16] 16. Horváth, K., Hajnal, I. (2014): Value Impairment of Contaminated Real Estate. Periodica Polytechnica Social and Management Sciences, Vol. 22, No. 2, pp. 141-148, 2014. DOI: 10.3311/PPso.7389

[17] 17. C. Breidert, M. Hahsler, T. Reutterer (2006): Areviewofmethodsformeasuringwillingness-topay,InnovativeMarketing,2(2006)/4

[18] 18. Fujiwara, D., Campbell, R. (2011). Valuation Techniques for Social Cost- Benefit Analysis: Stated Preference, Revealed Preference and SubjectiveWell-BeingApproaches.London.

[19] 19. Alpizar, F., F. Carlsson, and P. Martinsson (2003):"Usingchoiceexperimentsfornon-market valuation."ECONOMICISSUES-STOKEONTRENT8.1(2003):83-110

[20] 20. Zurada J, Levitan A S and Guan J, A comparison of regression and Artificial intelligence methods in a mass appraisal context, Journal of real estate research, 2011, No.3, pp. 349-387

[21] 21. Chaphalkar N B and Dhatunde M, Real property valuation using sales comparison method and multiple regression analysis, International Journal of Modern Trends in Engineering and Research, 2015,02, Issue 08, pp. 305-315

[22] 22. Bunyan Unel F and Yalpir S, Valuations of building plots using the AHP method,

International Journal of Strategic Property Management,2019,23,Issue3,pp.197–21

[23] 23. Benjamin J D, Guttery R S and Sirmans C F, Mass Appraisal: An Introduction to Multiple Regression Analysis for Real Estate Valuation, Journal of Real Estate Practice and Education 2004,7,No.1,pp.65-77,

[24] 24. Nallathiga et al., The Stigma Effect on PropertyValue:AStudyofValueDepreciationand Its distribution in India, In M G Korgaonkar and J Koner (Eds), Managing Construction and Related Sectors: Challenges, Opportunities, Status and Trends (COST) in India, Advances in Project, Real Estate and Infrastructure Management, Volume II National Institute of Construction Management andResearch,Pune,pp376-390

[25] 25. Myers G W, Is the valuer the barrier to identifying the value of sustainability?, Journal of Property Investment & Finance, 2013,31, Issue 4, pp.345–359

[26] 26.(Adetiloye, 2013) Financial Globalisation and Domestic Investment in Developing Countries (Brown and Matysiak, 2000) Brown, G.R. and Matysiak, G.R. (2000) Real Estate Investment: A Capital Market Approach. Financial Times/PrenticeHall.

Turn static files into dynamic content formats.

Create a flipbook