Property valuation possibly based on old court expert reports?

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Should I better ask here in the forum how to nicely calculate the market value of two properties in my favor? Seriously?! I’m not going to fool myself! I want to determine a value as objectively as possible, fully aware that appraisers can still significantly deviate from the values I calculate. In my situation, it’s possible that the other party (with opposing interests) could agree to my valuation and costs for authorized experts, among other things, might not even arise.

I have no idea what it has to do with taxes, banks, financing, separation of property, sale, etc., if I objectively want to determine a market value. I thank everyone for taking the time to read and respond and would prefer not to make this too lengthy.


>>> Forget the instructions on the internet. There really isn’t a simple formula.

Authorized experts must also specify exactly how they calculate the market value in a report. Regarding Property 1, I can’t really take much from the 2008 court appraisal in my opinion, as everything was vacant back then and it was only based on land size and building substance. It may be that the appraiser valued the property comparatively low back then, but now the property generates rental income and it should no longer be based on the building substance, but on income.

If you (nordanney) don’t know a simple formula, maybe another forum member does?

Property 2: I find the recommendation to look for comparable properties tedious and especially prone to errors. Other properties always have a different structural condition/size/energy consumption/ancillary costs, a different location, different land values, etc. If my land value is, for example, 50 €/m² and the area is 4,000 m², and in forced auctions I find appraisals with a land value of 250 €/m² and 400 m² area, is that the same or should my property be assigned another €100,000? How do I even evaluate the location? Isn’t that partly already priced into the land value? That’s too imprecise for me.

For this property I have an older reputable appraisal. Essentially, little has changed about the property. Of course, the building substance has aged, but things have also been renewed. For me, it is such that back then it was rightly assumed a remaining useful life of 70 years and that can be done again today. Also the location, transport connections, attractiveness of the city, etc., haven’t changed significantly. The property didn’t suddenly move from the middle of nowhere to a Berlin villa district. In this approximate calculation method I essentially only have to consider the time factor and can still add or subtract for "special circumstances" if there are any...

I have now found a house price index on Statistica. I hope it’s okay to attach it like this. A link is not allowed. The index base is 2015 with 100, in 2001 the house price was defined as 84.4, in 2022 as 162.9. When I calculate this in a rule of three so that 84.4 should be the base 100, the factor is 1.93. A house valued at €100,000 in 2001 would be valued at €193,000 today. Isn’t that a meaningful statement?

Nordanney, I still can’t understand why this shouldn’t be a good approach? Regarding Property 1, you also just shoot in the dark, estimating the market value at 7-8 times the annual rent without any further information about the property.

If you (nordanney) don’t know a simple formula, maybe another forum participant does?

No, that kind of thing is my job. There is no simple formula. I have shown you the way to a value.

For this property, I have an older reputable appraisal. Essentially, hardly anything has changed with the property. Sure, the building fabric has aged, but things have also been renewed. For me, it is such that the residual useful life of 70 years was rightly set back then and that can be done again today.

That is unprofessional. Something would have needed to be done energetically, windows renewed, floor coverings renewed, etc. – the exterior area has nothing to do with the residual useful life and is disregarded in an appraisal (unless extremely neglected or particularly high-quality).

I have now found a house price index on Statistica. I hope it is okay to attach it like this. A link is not allowed. The base index is 2015 with 100, in 2001 the house price was defined as 84.4, in 2022 as 162.9. If I recalculate this by rule of three so that 84.4 is the base 100, it results in a factor of 1.93. A house valued at 100,000 € in 2001 would be valued at 193,000 € today. Isn’t that a sensible statement?

No, it is not. It is an average for all of Germany. I am attaching a statistic for Thuringia – which is included in yours. There, absolute purchase prices even fell from 2000 to 2014.

Oh yes, please don’t forget the decline in average prices since 2022 – over 10%

Or you have boom regions that push the average upwards. Base Munich 2001 to 2021 ==> almost quadrupled.

Nordanney, I still cannot understand why this should not be a good approach? For property 1 you also just shoot into the blue, estimating the market value at 7-8 times the annual rent without any further information about the object.

Yes, I don’t get any further information from you either. And I’m not shooting into the blue, but estimating based on 30 years of experience in real estate financing. I used to carry out appraisals myself. Hence my estimate.

More input = more output.

I bet my estimate is closer than your projections derived from statistics out of ignorance.

Projecting any appraisals from 20 years ago is relatively pointless. The same goes for the income value, since you neither know the appropriate rent nor the factor, and with commercial properties everything gets even more complicated.

It is no longer understandable why I cannot look up comparable properties on classifieds, real estate portals, etc. and make a list of which rental prices for which storage spaces are currently being offered in the region. Of course, not just one offer, but several, and then calculate the average and, if you like, deduct 20-25% as negotiation margin. hanghaus2023 is currently suggesting for property 2 – search for comparable properties in forced sales and derive a value for your own property from that. So what now?

Besides, I already know at what price a storage room in a single-story building and the warehouse are currently rented. The problem with the warehouse is that it is rented well below value. Back then, we were glad to have found a tenant – now the situation is somewhat different. Especially since, in a current valuation, it should no longer be relevant why and for what reason someone was once offered an absolute friend’s price, but what the realistic market price is.

There are plenty of marketing campaigns from brokers or financial advisors offering a free assessment.

What costs nothing is usually worth nothing... In such a situation the broker or financial advisor only has a number in mind that they pulled out of thin air and that most likely corresponds to their own interests. You have already noticed that yourself.

Besides, I already know at what price a storage room in the single-story building and the warehouse are currently rented. The problem with the warehouse is that it is rented well below value. Back then, we were happy to have found a tenant – now the situation is a bit different. Moreover, in a current valuation, it should no longer be relevant why, how, or for what reason someone was once offered an absolute friend price, but rather what the realistic market price is.

That's true. But the existing lease is still taken into account. It's called underrent and is considered a value reduction in the valuation. With a 10-year contract, that can make quite a difference.

What costs nothing is usually worth nothing.

That makes sense. Your own assessment, where you actually have much less experience and knowledge than a real estate agent, is worth exactly what you just wrote. Unfortunately, nothing.

Well, you "should never trust any statistics you haven't falsified yourself" - that was exactly what my statistics professor used to say back then... No idea where your statistics come from. Apparently, everything contradicts what Statista shows. Why the house price index from Statista should be nonsense, but your statistics are correct, I don't understand.

It feels like everything has doubled since the introduction of the EURO, including the value of the property for me. I'm sure if I offered the property at the 2001 market value, I would have a buyer tomorrow who would be laughing their guts out. When I look at the price a totally dilapidated farmhouse in the neighborhood with a barn and outbuildings recently went for, and in 2001 my property here was only valued about 35% higher than that... Seriously - the buyers are currently renovating the barn and could only leave the outer walls standing. The farmhouse and the outbuilding look like they will be demolished to me. They are putting a lot of money into it to make everything livable. Sure, then it’s new, but definitely still far more expensive than if I multiply my 2001 market value by 1.93.

No idea where your statistics come from. Apparently, everything contradicts what Statista shows. Why the house price index via Statista is supposed to be nonsense, but your statistics are correct, I don't understand.

All statistics are correct. That is the beauty of it. One, for example, is also from Statista - the one from Thuringia. Your population base is all of Germany with very old demolition huts up to new builds. With that, you can read the trend - price growth (which is normal with existing inflation). The more granular you get, the more interesting and especially different it becomes. And the statistics do not consider that your property changes - renovation, aging. One more question: Is there a particular reason why you do not respond to concrete questions about your properties? Afraid that you won't like the assessments then?