Property valuation possibly based on old court expert reports?

Then you should simply answer simple questions. It is certainly sensible to know what the purpose of the exercise is.

I have now browsed the ZVG for quite some time. There you can find plenty of reports that evaluate such projects in various ways. You will surely find a project that fits your plans.

Otherwise, let professionals evaluate it. You can find suitable companies in the area in the ZVG.

I am very sure that I will hardly find any appraisals at ZVG that are similar to these 2 properties. For me, the total and living area is significantly larger than the standard, and above all, the land value can vary extremely. The land value in this area fluctuates well between €30 and €230/m², and with almost 4,000m² of land, these are dimensions beyond good and evil when it comes to what could come out of a VW calculation.

And why should I compare the property to external objects when a court appraisal was made in 2001? I think the idea of transferring the appraisals of Immo 2 from back then to now can't possibly lead me as far astray as comparable properties in a completely different location... For Immo 1, it’s clear to me that it is no longer calculated based on substance value, but rather on income value.

The proposal to have it evaluated by experts overshoots the mark for my current situation. Nobody does that for free and I can't and don't want to bear the costs at this time. Besides, two appraisers will never come up with the same market value. If my situation develops to the point that a court orders an appraisal, the private appraisal will probably count less than one from a court-appointed expert, won’t it?


>>> "That was a clear assessment of the market value!"

For me, that was just a listing of factors, but no instructions on how to calculate it.

I have indeed found instructions on the internet for the calculation, but I am not allowed to post the link here. Suddenly it goes into a land net income that is somehow pulled out of thin air, and less the land value interest is the building net income. The land net income would be the income from the building plus expected appreciation of the undeveloped land... Anyone can just make something up and fudge the numbers. But I don't want that. I would like to determine a value for myself that is as objective as possible—regardless of my personal interests in how favorable the market values should be for me. I am looking for a simple, comprehensible formula to calculate the property value according to income value. Especially since the VW calculation is one thing, but what you can actually (re)sell a property for is another matter.

>>> "Renovation and maintenance..."

What I meant by that is that I didn’t want to factor in depreciation because nothing has been done on the residential building and, on the other hand, no massive value-enhancing upgrades have been made. That would be a good starting point to project the current price upwards on an index basis. There is a construction cost index, isn’t there? Well, that certainly deals more with the increase in construction cost prices. But what about a kind of house price index? Are there no statistics at all about the price level at which a really large mass of properties were sold each year? In that case, local and structural conditions would play less and less of a role. Something like: a typical residential property cost about €100,000 in 2000 and now €250,000. Then you could quickly derive by rule of three what the property costs now if it was worth, say, €170,000 in 2000...

I just wanted to tell you that in the ZVG the most diverse valuation methods occur. You can then apply them to your object. You may not want to say what the purpose of the exercise is. Why not, actually?

@nordanney
>>> "That was a clear assessment of the market value!"

For me, it was just a listing of factors, but no instructions for the calculation.

These are also all the (although not exhaustive) factors considered in an appraisal.

I have indeed also found instructions on the internet for the calculation, but I am not allowed to post the link here. Suddenly it’s about a land net income that is somehow pulled out of thin air, and minus land value interest, that would be the building net income. The land net income would be the income of the building plus expected appreciation of the undeveloped land... Anyone can pull something out of thin air and justify the calculation nicely. But I don’t want that. I would like to determine a value for myself as objectively as possible – independent of my personal interests in how the market values should turn out favorably for me. I am looking for a simple, comprehensible calculation formula for how I can calculate the property value based on income approach. Especially since market value calculation is one thing, and what you can actually buy (or sell) a property for, is another matter.

Forget the instructions on the web. There is no really simple formula. Basically, for income-producing properties, the following procedure is followed:
- Determination of the land value – adjustment of the standard land value based on plot size, usability, and actual utilization
- Determination of a gross income based on the applicable rent
- Determination of a net income that takes operating costs into account (administration, maintenance, vacancy loss, CO2 surcharge)
- Deduction of land value interest from net income = building net income ==> this multiplied by the resulting present value factor (there are tables for this – remaining useful life to property interest rate) = present value
- Addition of present value to land value = market value
- if applicable, surcharges or discounts

If the remaining useful life is less than 10 years, you have to calculate differently as well. The land value does not change much regarding the market value, because you deduct an increased land value interest within the deduction and add it back at the end.

Expected value increases are not allowed, since this is a point-in-time consideration. And yes, depending on the intention, you can definitely manipulate values considerably...

In practice, from experience, one can also simply work with rent income factors. A new logistics property is currently calculated at about 21 times the annual rent (good location, good and green property). Typical rental housing construction (old stock) in the Ruhr area currently yields about 15 times the annual rent. Etc.

Just provide the information about the property. That makes it easier.

>>> "Renovation and maintenance..."

What I meant was that I did not want to factor in any wear and tear because nothing had been done to the residence, and on the other hand, no major value-enhancing improvements had been made.

Yes, you definitely have to account for depreciation. The measure brings the property into a condition that does not require additional deduction. The depreciation due to age definitely applies = loss of value due to age.

That would be a good starting point to extrapolate the current price on an index basis. There is a construction cost price index, isn’t there? Sure, that mostly relates to the increase in construction prices. What about a kind of house price index? Are there no statistics on the price level at which a really large volume of properties is sold each year? In that case, local and construction circumstances would play less and less of a role. Something like: a typical residential property cost around €100,000 in 2000 and now €250,000. Then you could quickly calculate the current property value with a rule of three if it was worth €170,000 in 2000,...

I have given you some tips. And no, there are no dedicated indexes etc. for your purpose. You have absolutely no chance to “just” extrapolate the value to today’s basis. You might hit the correct value, but not because your calculation was good, but simply by chance. Such a rule of three as you mention is unprofessional, without any data basis, and simply wrong.

In what way does that affect the market value?

None of that affects the value. However, the result of an appraisal essentially depends on the objective. All valuation methods have a certain margin of discretion. If you want to sell at a high price, you use it to the upside. If you want to avoid inheritance/gift taxes, you naturally use it to the downside. And ultimately, one should not forget that every appraisal is more or less a guess. You only get a real market price through a sale.

In my opinion, it is important what you need the prices for. Banks use different software, to which you have no access, like Sprengnetter, and make a security discount. Brokers use that too and add a markup, giving you the hope to sell expensively. If something is needed for inheritance/divorce, you need a licensed expert. Projecting any appraisals from 20 years ago is relatively pointless. The income value is also pointless, since you neither know the appropriate rent nor the factor, and with commercial properties everything becomes even more difficult. There are plenty of promotional offers from brokers or financial intermediaries that offer a free assessment.