Transparency in accordance with internationally accepted standards for property valuation reporting and property snagging in Dubai is key to the achievement of stability in an otherwise opaque real estate market in this age of globalized real estate investments.
Transparency in property valuation ensures that valuation is done at an appropriate frequency that is conducive to both investors and the property owners. It also helps minimize the chances for abuse of powers and favors.
- Types of Property Valuation Services: Two major types of property valuation services are the:
- tangible types
- Intangible vs Tangible Valuation: Intangible valuations take into consideration the market value of the land and any building on it that might be sold while tangible valuations take into account only tangible assets of the property.
- Uniform Market Value: There are several ways to do a Valuation, one of which is the use of a commonly accepted Uniform Market Value (USD). This is based on recent sales prices of similar properties in the area in which the property is being appraised. These Uniform Market Values is widely used by most of the real estate professionals as a standard way of pricing properties.
- Break Even Analysis: Another popular way of valuating properties is the use of the break-even analysis. Property valuation firms would look at the present day market value of comparable properties in the area where the proposed project is located. This type of Valuation will not take into account the future market value of the proposed property as it would have an effect on the overall cost of construction. The break-even analysis method was widely used by many property valuation firms until the advent of new techniques.
- Economically Operating Tables:Apart from the above two methods, there are many others including the usage of Economically Operating Tables, the use of Comparisons, assumptions, and multipliers. But many property valuation firms also use computerized tools that aid them in conducting the appropriate valuations. Most of these computerized tools are capable of generating more accurate valuations than even the most experienced and well-trained valuers.
- Intangible vs Transfer Pricing: Other types of Property Valuations include the process of Intangibles and Transfer Pricing. In intangibles, this involves the financial effects of:
- Name and reputation
- Brand and design
- Technology and business model
- geographic location and plant
- equipment and software and other intangible assets
It is important for you to understand the factors which can affect the price of your assets to come up with the most accurate transfer pricing estimate. On the other hand, intangible assets are of different types such as: