Looking to get your property valued? Then you must know the processes and the
intricacies involved in it to ensure that you are not duped. These days, Cyprus
is winning rave reviews from real estate investors all around the world as ‘the
place’ to buy a property in. So if you are planning to invest in a property in
Cyprus or looking to sell one here, then it is essential that you be well up on
the ‘ins and outs’ of getting your property evaluated accurately.
The Ways of Property Valuation As in Cyprus
There isn’t any special way in which property is valued in Cyprus. Cyprus goes
the way the world moves. That is to say, in Cyprus, property evaluation is done
by a certified appraiser using the time-tested conventional methods like the
Comparable Property Method and the Discounted Value of Rentals Method.
In the Comparable Property Method, an average estimate of similar properties in
the locality in unit area terms is first chalked out. This value is then
multiplied with the total area of your property to arrive at an approximate
figure for it. Furthermore, you can make modifications to this value according
to the particular pros or cons of your property.
In the Discounted Value of Rentals Method of ascertaining the value of a
property, there are some predictions involved. To elaborate, the rent earning
capacity of your property in the future is calculated based on a thorough
analysis of the likely spurt in real estate demand in and around the area as
weighed against the supply of properties and also the possible capital and
rental escalation of the property. That is to say, the appraiser estimates what
value the property is going to command in the future. This value is then
discounted or marked down to the current interest rate, thus giving you a
plausible valuation of the property.
There was variations in the way the valuation of a property is done. For
instance, there are people who would come up with an estimate based on the
remaining lifespan of the property, which in turn is calculated taking into
consideration the kind of building material used, the design specifics that have
been implemented and of course, the current age of the property.
The valuation of a property also depends to a great extent on whether the
property is currently facing any litigation or whether or not the title of the
property is clear. This is obvious because no one would like to be saddled with
property that is accompanied by a host of lawsuits and debts.
Terms Related To Property Valuation
There are certain terms and concepts that you need to be well grounded in when
you venture out to have your property evaluated. And this is irrespective of
whether you getting your property evaluated in Cyprus or anywhere else in the
world.
Firstly, you should know the distinction between “market value” and “price”. The
market price of your property is its value in a competitive setting and is
usually termed as the fair market value. On the other hand, the price of a
property is not necessarily equal to its market value.
The price of a property may be lower than its market value if say for instance,
you are having it evaluated in Cyprus where the local authority taxes tend to be
low. Again on the other hand, considering that Cyprus flaunts one of the highest
per capita GDP figures in Europe, property dealers may well raise the value of
the property. In other words, the price of a property is dependent upon many
such specific factors and may not correspond to its market value.
The investment value of a property pertains to a value that has been ascribed by
an investor. This may be greater or less than the fair market value. Say for
instance, there’s an investor who has realized the potential of Cyprus as a hot
and happening tourist destination of Europe and has even managed to grab a
property in a prime location of the island. He can then very well command quite
a steep value for the property, well above its fair market value.
The value-in-use of a property refers to the value that the user attaches to a
property. This may or may not correspond to the market value of the property and
is usually more dependent on the discretion of the user of the property.
The insurable value of a property is its value after having been covered by an
insurance policy. Usually this value will not include the value of the site.
However these are terms that differ between countries.
What is the Property Evaluation Scenario in Cyprus?
Cyprus boasts of one of the fastest growing real estate markets in Europe and is
quite a stable one at that too. Besides, this comparatively new entrant to the
EU also has a stable economy, with low commercial and income taxes and moderate
inflation figures. When you are dealing in property here, you can be assured
that your finances won’t go down the drains.
These favourable features of the Cyprus economy entails that when you go in for
property evaluation here, you can expect to get the highest possible value for
your property. Of course, the highest possible value of a property depends on
the highest and the best use of the property. And this use is determined by the
appraiser.
However, when you have a property in Cyprus, a tourist-friendly island with a
steady influx of tourists all throughout the year, a pleasant climate and a
heady cultural ambience, you can be dead sure that your property is going to
fetch alluring values.
Other considerations in determining the value of the property include market
value, condemnation value, quick sale value and the like.
Knowing the intricacies involved in property valuation is vital to clinching the
best bargain in the market. The terms and concepts may sound confusing and the
evaluation methods may seem a trifle difficult to comprehend. But you can be
rest assured that in a booming property market like Cyprus, your knowledge will
definitely come in handy and get you the pot of gold.