Introduction
Chapter 1. Methodological foundations cost estimates property
1.1 The concept of property valuation, objects of valuation, types of appraised value
1.2 Legislative and legal framework, goals and stages of property valuation
Chapter 2. Main approaches and methods used in property valuation and their application
2.1 Essence and features of approaches and methods of property valuation
2.2 Advantages and disadvantages of applying different approaches to property valuation
Conclusion
Bibliography
Introduction
Today in Russia there are various forms of ownership that enable the owner to dispose of his property at his own discretion. In this regard, questions arise about the value of property, the need to resolve property disputes, in which the parties were forced to resort to the services of independent price arbitrators to determine the objective value of a particular property.
The development of valuation activities in the Russian Federation is directly determined by the development of market relations. Property valuation of various types of property is increasingly becoming an integral and effective tool market economy.
In the context of the development of a market economy, the valuation of machinery, equipment and vehicles is becoming increasingly important. The importance of this type of valuation activity is determined both by the expansion of the private property sector and by the need to increase investment.
It should be noted that machines and equipment are characterized, as a rule, by a large number of different parameters and a variety of nomenclature. The number of machinery and equipment facilities in the country and even in a separate region is very large.
Determination of the market value of machinery and equipment is a complex process, since it is often impossible to find an absolutely identical analogue for the property being valued during the valuation process.
To achieve the most accurate assessment of property, special techniques and methods are used, which are discussed in this course work.
The course work consists of an introduction to two chapters and a conclusion. The first chapter discusses the concept of property valuation, objects of valuation, types of appraised value, as well as the legislative framework appraisal activities, goals and stages of property appraisal. The second chapter discusses the main approaches and methods used in property valuation and their application.
In the course of writing term paper The following materials were used: the Federal Law “On Valuation Activities in the Russian Federation”, Federal Valuation Standards, State Valuation Standards, textbooks on property valuation, materials from the journal “Voprosy Valuation”, etc.
Chapter 1. Methodological bases for assessing the value of property
1.1 The concept of property valuation, objects of valuation, types of appraised value
Property – objects of the surrounding world that have utility, and the rights to them. .
Property valuation is an orderly, purposeful process of determining in monetary terms the value of the relevant property, taking into account the potential and real income brought by them at a certain point in time in a particular market segment.
Property valuation is the most general term applied to valuation activity and all its possible objects.
According to Article 5 of the Federal Law " On valuation activities in the Russian Federation» No. 135-FZ property valuation may apply to the following objects:
1. Separate material things (an apartment, a car, a collection of minerals, etc.);
2. The totality of things constituting the property of a legal or individual(this includes business as an object of evaluation);
3. Right of ownership and other property rights;
4. Rights of claim, obligations (debts);
5. Work, services, information;
6. Other objects civil rights in respect of which the legislation of the Russian Federation establishes the possibility of their participation in civil circulation.
As a rule, property valuation is divided into four large groups:
1. Valuation of the enterprise (business);
2. Real estate appraisal;
3. Evaluation of equipment (including machines, Vehicle);
4. Cost estimate intangible assets and intellectual property.
Valuation - determination of the value of an object at a particular point in time in accordance with the selected standard of value.
Price is the cost of production factors embodied in this object.
The value of the property may vary. The type of value determined determines the purpose of the assessment, and the method of assessment determines the realization of the purpose of the assessment.
When using the concept of value in the implementation of valuation activities, a specific type of value is indicated, which is determined by the intended use of the valuation results.
When carrying out appraisal activities, the following types of value of the appraised object are used:
· market price;
· investment cost;
· liquidation value;
1. When determining market the value of the appraised object is determined by the most probable price at which the appraised object can be alienated as of the appraisal date as of open market in a competitive environment, when the parties to the transaction act reasonably, having all the necessary information, and any extraordinary circumstances are not reflected in the value of the transaction price, that is, when:
2. When determining investment the value of the appraisal object is determined by the value for a particular person or group of persons when established by this person (persons) investment purposes use of the object of assessment.
3. When determining liquidation the value of the appraisal object is determined by the estimated value that reflects the most probable price at which this appraisal object can be alienated for the period of exposition of the appraised object, which is less than the typical exposure period for market conditions, in conditions when the seller is forced to make a transaction for the alienation of property.
4. When determining cadastral the value of the object of appraisal is determined by the methods of mass appraisal of the market value, established and approved in accordance.
The main parameters that determine the value of property are: utility, demand, supply, scarcity, the possibility of transferring rights to property, the cost of creating property.
1.2 Legislative and legal framework, goals and stages of property valuation
The legislative framework for valuation activities in Russian Federation are:
1) Federal Law of July 29, 1998 No. 135 - FZ "On Valuation Activities in the Russian Federation" (last edition of Federal Law of July 24, 2007 No. 220 - FZ). Basic provisions.
2) Federal assessment standard " General concepts assessments, approaches and requirements for assessment” (FSO No. 1), approved by the Order of the Ministry of Economic Development of Russia dated July 20, 2007 No. 256. Main provisions.
3) Federal valuation standard "Purpose of valuation and types of value" (FSO No. 2), approved by Order of the Ministry of Economic Development of Russia dated July 20, 2007 No. 255. Main provisions.
4) Federal valuation standard "Requirements for the valuation report" (FSO No. 3), approved by Order of the Ministry of Economic Development of Russia of July 20, 2007 No. 254. Main provisions.
According to Federal Law No. 135-FZ dated July 29, 1998 "On Appraisal Activities in the Russian Federation", appraisal activities are subject to mandatory licensing.
Property appraisal is carried out by licensed appraisers on the basis of a property appraisal agreement with the obligatory use of all three classical approaches to property appraisal - profitable, comparative (market) and costly.
The amendments made to the Federal Law "On Valuation Activities in the Russian Federation" establish the transfer of a significant part of control over activities in this area from government agencies self-regulatory organizations of appraisers, which is associated with the abolition of licensing of appraisal activities. An appraiser is accepted as a member of a self-regulatory organization of appraisers by the decision of its collegiate management body. for breaking the law and federal standards appraiser may be excluded from the membership of the organization also by the decision of its collegiate body.
According to Art. 8 FZ-135, appraisal of appraisal objects is mandatory if appraisal objects owned in whole or in part by the Russian Federation, constituent entities of the Russian Federation, or municipalities.
Typically, the purposes of property valuation are:
Determining the value of property during its privatization, transfer to trust management, lease, nationalization;
the use of property as collateral;
Sale or other alienation of property;
· Assignment of debt obligations related to the objects of assessment;
transfer of property as a contribution to authorized capital, funds legal entities;
· mortgage credit lending individuals and legal entities;
buyout or other withdrawal of property from the owner provided for by law for state or municipal needs;
carrying out an assessment of property objects in order to control the correctness of paying taxes in the event of a dispute on the calculation of the taxable base;
· preparation of marriage contracts, division of property of divorcing spouses at the request of one of the parties or both parties in the event of a dispute over the value of this property;
Thus, the purposes of property valuation can be very different, but very often the valuation is necessary for various transactions.
The property appraisal includes the following steps:
1) Definition of tasks.
At this initial stage of the assessment work, one of the most important is the question of formulating the purpose of the assessment. In the process of communication between the customer and the appraiser at the stage of setting the task, the object of assessment is determined, that is, what the customer wants to evaluate in the form of a set of material objects and (or) rights; the purpose and objectives of the appraisal of the appraisal object, as well as the type of value.
2.5.1. Comparative approach
Comparative approach to valuation is a set of methods for valuation based on a comparison of the object of valuation with its analogues, in respect of which there is information on the prices of transactions with them.
Conditions for applying the comparative approach:
1. The object must not be unique.
2. Information must be comprehensive, including the conditions for making transactions.
3. Factors influencing the value of comparable analogues of the property being valued must be comparable.
Basic requirements for analogue:
The analogue is similar to the object of assessment in terms of the main economic, material, technical and other characteristics;
- similar terms of the transaction.
The comparative approach is based on the principles:
substitutions;
- balance;
- supply and demand.
Stages of the comparative approach:
Market research;
- collection and verification of the reliability of information on offered for sale or recently sold analogues of the object of evaluation;
- comparison of data on selected analogues and the object of assessment;
- adjustment of sales prices of selected analogues in accordance with the differences from the object of assessment;
- Establishing the value of the appraisal object.
An adjustment to comparable sales is necessary to determine the final value of the property being valued. Calculation and adjustments are made on the basis of a logical analysis of previous calculations, taking into account the significance of each indicator. The most important is the precise determination of the correction factors.
Advantages of the comparative approach:
1. The final cost reflects the opinion of typical sellers and buyers.
2. Sales prices reflect the change financial terms and inflation.
3. Statistically justified.
4. Adjustments are made for differences in the compared objects.
5. Relatively easy to use and gives reliable results.
Disadvantages of the comparative approach:
1. Sales differences.
2. Difficulty in collecting information on practical sales prices.
3. Difficulty in collecting information about the specific terms of the transaction.
4. Dependence on market activity.
5. Dependence on market stability.
6. Difficulty reconciling data on significantly different sales.
2.5.2. Cost approach
Cost approach- this is a set of valuation methods based on determining the costs necessary to restore or replace the object of assessment, taking into account accumulated depreciation. It is based on the assumption that the buyer will not pay more for the finished object than for the creation of an object of similar utility.
When applying this approach, the costs of the investor, not the contractor, are taken into account.
This approach is based on the principle of substitution.
Information needed to apply the cost approach:
Level wages;
- the amount of overhead costs;
- equipment costs;
- profit margins for builders this region;
- market prices for building materials.
Stages of the cost approach:
Cost calculation land plot taking into account the most effective use (C s);
- calculation of costs for new construction of buildings being assessed (С ns);
- calculation of accumulated wear (I n):
- physical deterioration- wear associated with a decrease in the performance of an object as a result of natural physical aging and the influence of external adverse factors;
- functional wear- depreciation due to non-compliance with modern requirements for such objects;
- external wear- depreciation as a result of changes in external economic factors;
- calculation of the cost of improvements, taking into account the accumulated wear: Su=C ns -C u;
- determination of the final cost of real estate: C zp = C s + C y.
Advantages of the cost approach:
1. When evaluating new objects, the cost approach is the most reliable.
2. This approach is appropriate and/or the only possible one in the following cases:
Analysis of the best and most efficient land plot;
- feasibility study of new construction and improvements;
- assessment of public-state and special facilities;
- valuation of objects in inactive markets;
- valuation for insurance and taxation purposes.
Disadvantages of the cost approach:
1. Costs are not always equivalent to market value.
2. Attempts to achieve a more accurate assessment result are accompanied by a rapid increase in labor costs.
3. Inconsistency between the costs of acquiring the property being assessed and the costs of new construction of exactly the same object, since accumulated depreciation is deducted from the cost of construction during the assessment process.
4. Problematic calculation of the cost of reproduction of old buildings.
5. Difficulty in determining the amount of accumulated wear and tear of old buildings and structures.
6. Separate assessment of the land plot from buildings.
7. Problematic evaluation land plots in Russia.
2.5.3. income approach
income approach is based on the fact that the value of real estate in which capital is invested must correspond to the current assessment of the quality and quantity of income that this property is capable of bringing.
income approach- this is a set of methods for assessing the value of real estate, based on determining the current value of the expected income from it.
The main prerequisite for calculating the value of this approach is the lease of the property. Capitalization of income is carried out to convert future income from real estate into current value.
Capitalization of income is a process that determines the relationship between future income and the current value of an object.
Basic income approach formula (IRV - formula):
where V is the value of the property,
I - the expected income from the property being valued. Income usually refers to the net operating income that real estate is capable of bringing in for a period
R - the rate of return or profit - is the ratio or rate of capitalization.
Capitalization ratio - the rate of return, reflecting the relationship between income and the value of the object of assessment.
There are two types of capitalization:
Direct capitalization;
- capitalization of income at the rate of return on capital.
With direct capitalization, two quantities are considered: annual income and the capitalization rate.
Capitalization rate is the ratio of the market value of the property to the net income it brings.
Expected income is determined by analyzing income during the period of ownership of the property.
Discount rate- norm compound interest, which is used when recalculating at a certain point in time the value of cash flows arising from the use of property.
Stages of income approach:
1. Calculation of the sum of all possible receipts from the object of assessment.
2. Calculation of the actual gross income.
3. Calculation of costs associated with the object of assessment:
Conditionally permanent;
- conditional variables (operational);
- reserves.
4. Determining the amount of net operating income.
5. Convert expected returns to present value.
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Depending on the variable factors, methods for estimating the cost of housing can be divided as follows: income, cost and comparative.
It should be pointed out that in a "perfect market" the use of each method should give the same result. Currently, none of the markets can be called perfect (supply and demand are not in balance, market participants have incomplete information, organizations do not function effectively, etc.). Thus, these methods may give different results.
In essence, the housing valuation methodology should take into account the structure of cash flows that are formed in the housing market, namely:
The income approach is most often applied to the valuation of a business. This method involves calculating the value of an organization based on its current value, expected future income and perceived risks. The income approach uses the discounted cash flow method. When evaluating residential real estate, this approach is most often used.
It is customary to distinguish between two types of cash flows. The first is formed at the expense of equity (the so-called cash flow for equity, eng. Equity Cash Flows, ECF). The second is formed by all invested funds(cash flow for all invested capital, English CapitalCashFlows, CCF). In both models, cash flow can be calculated as nominal (at current prices) and real (adjusted for inflation), depending on the goals of the analysis.
The CCF model is primarily used in the evaluation of organizations that carry out various activities. For example, these can be: the extraction and sale of raw materials, the production of own products and their sale, the provision of logistics services. However, as Professor A.G. Gryaznov, in practical activities more popular model cash flow equity, while the cash flow model of all invested funds, in her opinion, is less in demand for estimating the value Russian companies. This is due to the fact that organizations do not implement financing raising schemes similar to those used by companies in Western countries where this method was first introduced. Both methods are used to evaluate housing, due to the fact that it is possible to calculate the volume of all invested funds, since each residential property is perceived by the organization as another investment project.
The cost approach is also called the property approach. This is due to the fact that the value of a residential property can be considered taking into account the costs incurred.
Due to inflation, changes in market conditions, as well as the accounting methods used, the carrying value of assets and liabilities does not correspond to their market value. As a result, the valuation of residential real estate implies adjustments to indicators accounting.
At the initial stage, the market value of all assets and liabilities of the company is estimated. Further, the value of liabilities is subtracted from the fair market value of the assets. As a result this action formed assessed value organization's own capital.
The comparative approach implies that the assessment of the current value of the company is the estimated amount of its sale in the formed market. In other words, the sale price of a comparable company, which is fixed by the market, is considered to be closest to the real price. Due to the fact that there are a large number of comparable objects on the housing market, this method can be successfully used in assessing the value of residential real estate.
Determining the value of housing by objective and independent market conditions is the main advantage of this approach. The task of the appraiser in this approach is only to make changes in order to ensure the comparability of residential real estate. At the same time, income and cost approaches to estimating the cost of housing are used exclusively on the basis of calculations.
At the same time, the considered approach is based solely on retrospective results and does not take into account the prospects for the development of the housing market, which can both positively and negatively affect the assessment. Also, the comparative approach requires an extensive database that analyzes the property and potentially comparable residential real estate from different sides. Collecting such data is extremely costly in terms of time, labor and financial resources. The use of a comparative approach is severely limited by the lack of universal assessment methods. This is due to the fact that the process of selecting comparable properties mainly involves the subjective judgment of the appraiser, as well as the implementation of the necessary changes. It should be noted that the comparative approach in general and the method of comparative coefficients in particular have not received due distribution in Russian practice due to the specifics of the market situation, which is characterized by incomplete information and insignificant observation periods.
Summing up, it should be said that the use of the comparative method of valuation of residential real estate is extremely difficult. Housing markets are subject to significant changes in the market conditions for fairly short periods of time, which imposes certain restrictions on the cost approach for those organizations whose fixed assets are generally formed on the basis of imported equipment and depend on large debt financing. In this case, a discrete cost calculation (for example, on a monthly basis) can give significantly different values, which makes such valuation values inconsistent with economic reality and complicates the formation of not only a long-term, but also an operational cost management policy.
Under these conditions, according to the author, the most reliable approach to assessing and managing the value of housing objects is the profitable approach using the discounted cash flow method, where the weighted average cost of capital is used as the discount rate (calculated using A. Damodaran's methodology and the CAPM model). The horizon for calculating the net cash flow from the total capital should take values no more than five years using the cost indicator in the post-forecast period. As a result of residential real estate appraisal, on the one hand, medium-term trends are taken into account, and on the other hand, the appraisal is not subject to short-term marginal fluctuations in housing market indicators (since they have an insignificant impact on risk-free rates and default spread, which depends on the credit rating of developers.
The cost approach to real estate valuation is based on the calculation of the costs of reproduction (or replacement) of buildings and structures being valued, taking into account all types of wear and tear and land value.
The basis of the cost approach is the principle of substitution, which states: "A knowledgeable buyer will not pay more for a property than it would cost him to acquire a plot of land and construct a building within a reasonable timeframe."
Algorithm (technology) for estimating the cost approach:
1) determination of the value of the land plot as undeveloped;
2) calculation of the full cost of reproduction (PSV) or full replacement cost (PSZ);
3) calculation of all types of wear (physical, functional, external);
4) definition residual value real estate object;
5) calculation of the value of the object as the sum of the residual value of improvements (buildings, structures) and the value of the land.
The cost of real estate = the cost of new construction + the profit of the investor (developer) - the amount of depreciation + the cost of the land.
Full cost of reproduction (FRC) - the cost of building an exact copy of a building (structure) at current prices on the date of assessment using exactly the same materials, building standards and the same quality of work.
Full replacement cost (LTC) is the cost (costs) of a new construction project at current prices as of the date of assessment, which, in terms of its functional characteristics, is a close analogue of the property being assessed, but built from new materials, with a modern layout and design.
It is determined by construction costs at current prices on the actual date of evaluation of an object of the same utility using modern materials, standards, projects and architectural solutions.
Methods for calculating the total cost of reproduction.
There are several methods for determining PSV and PSZ:
2) comparative unit method;
3) quantitative analysis method ( estimated method);
4) method of breakdown into components (element-by-element method), etc.
index method. Represents the determination of the cost of reproduction by multiplying its book value by a certain index. Used for previously built objects.
The departments of technical inventory have data on the replacement cost of the object as of the date of the last revaluation: for housing - 1984, and for buildings, structures of enterprises - data from the last revaluation made by enterprises.
The replacement cost obtained according to the technical inventory data must be updated (brought to a modern form) through the coefficients for converting the replacement cost into prices at the time of valuation. These coefficients are taken from the regional information and analytical bulletin of the RCCS (Regional Centers for Pricing in Construction) "Price Indices in Construction", as well as quarterly collections of KO - INVEST.
The essence of the price index for construction products can be expressed by the formula:
And tech / bases = С tech / С bases, (1)
where С tech - cost construction products, works or resources at the current price level;
From the bases - the same in the basic price level.
Comparative unit method applies to standard standard buildings and structures.
It involves the calculation of the full cost of reproduction (full replacement cost) based on the cost of 1 unit of area, volume, etc. typical building:
PSV = B x V str (S) x k, (2)
where in - estimated cost units of measurement (1 cubic meter, 1 sq. m, 1 seat, etc.) of the building;
V str (S) - construction volume (area) of the building;
K is a correction factor that takes into account the design solutions of the building, internal equipment, territorial belt, climatic region.
This method involves the calculation of the cost of building B - a comparative unit (1 sq. M, 1 m3) of a similar building. This cost is adjusted for existing differences in the compared objects (planning, equipment, etc.) and multiplied by the number of comparison units (area, volume).
To determine the amount of costs, various reference and normative materials(UPVS - Aggregated indicators of replacement cost).
In 1970-1972. branch design institutes of ministries and departments of the USSR developed collections of UPVS buildings and structures for the revaluation of fixed assets as of January 1, 1972.
In total, 37 collections of aggregated indicators of the replacement cost of buildings and structures of various industries have been developed National economy, which show the value of the cost of 1 cu. m (1 sq. m) of various buildings and structures and correction factors.
The evaluation tables include the following indicators:
1) capital group;
2) characteristics of building structures and elements of their improvement;
3) unit cost construction works for 1 cu. m (1 sq. m);
4) necessary notes, correction factors of allowances and reductions associated with the presence or absence of one or another type of improvement in the assessed building;
5) specific cost weights of individual structural elements in percent.
This method is widely used by appraisers in their practice, especially when revaluing fixed assets of enterprises for old buildings.
For buildings and structures built in last years using new building materials, new technologies, when calculating the total replacement cost, use the Handbook of the Estimator and Appraiser of Real Estate Objects "Enlarged indicators of the basic cost of construction for analogues of UPBS-2001" edited by P.V. Goryachkin and V.S. Bashkatov.
Quantitative analysis method(cost estimate method) is a simulation of construction estimates, while the object of assessment is considered as a newly built one.
This method requires a detailed calculation of all costs for the construction of the installation. constituent parts new building, indirect costs (building permit, topographic survey, land acquisition, overhead costs including insurance and taxes, developer profits, etc.), as well as direct costs.
To apply this method, you first need to compile a quantitative list of all materials and equipment and make a calculation of the labor required to install each element. To these costs must be added indirect and overhead costs, as well as the profit of the developer. Method 3 is the most accurate, but also the most time-consuming. When applying it, novice appraisers make many mistakes, since in-depth theoretical training and considerable practical experience are required, therefore it is advisable to involve qualified estimators.
Breakdown method into components (element-by-element method). The difference between this method and the comparative unit method is that the cost of the entire building is calculated as the sum of the costs of individual building components of foundations, walls, floors, etc. The cost of each component is derived from the sum of the direct and indirect costs required to set up a unit of volume.
Depreciation is a decrease in the value of a property due to various reasons.
In appraisal activities, depreciation is considered the main factor for determining the present value, regardless of its original actual cost.
At the third stage of the cost approach, the amount of accumulated depreciation of buildings and structures is determined. The term "wear and tear" in the theory of valuation is understood as the loss of the usefulness of an object, and, consequently, its value for various reasons. Thus, accumulated depreciation is understood as a decrease in the value of real estate as a result of the impact of various adverse factors. In value terms, accumulated depreciation is the difference between the replacement cost and the market price of the property being valued.
Types of wear are presented in table 2.
Table 2 - Types of wear
Accordingly, wear can be of three types:
1. Physical depreciation - the loss or decrease in the value of the object due to the gradual loss of the technical and operational qualities of the object that were originally laid down during the construction under the influence of natural and climatic factors, as well as human life. Physical deterioration reflects changes in the physical properties of a property over time (for example, defects in structural elements).
2. Functional depreciation is a loss in value caused by the fact that the object does not meet modern standards: in terms of its functional utility, architectural, aesthetic, space-planning, constructive solutions, livability, safety, comfort and other functional characteristics.
The cost expression of functional depreciation is the difference between the cost of reproduction and the cost of replacement, since the calculation of the latter excludes functional depreciation.
In addition, functional wear can also be removable and irreparable.
Removable functional wear can include restoration of built-in cabinets, water and gas meters, plumbing fixtures, flooring and roofing.
Eliminable depreciation criterion - the additionally received value exceeds the cost of restoration;
3. External, or economic depreciation, is a decrease in the value of a property due to a negative change in its external environment, due to either economic, or political, or other external factors. Causes of external deterioration: the general economic decline of the area in which the object is located, the actions of the local administration and federal bodies in the field of taxation, insurance and other changes in the capital market, land and employment.
Significant factors affecting the amount of external wear are proximity to unattractive natural or artificial objects: swamps, sewage treatment plants, restaurants, hospitals, schools, etc.
External wear is in most cases irreversible.
Method of measuring external depreciation: analysis of rental sales, when two comparable properties are sold on the real estate market, one of which has signs of depreciation from external influences. The difference in prices will make it possible to draw a conclusion about the amount of wear and tear of the external impact of the assessed building.
Physical and functional wear can be both removable and irremovable, while the wear of external influences is in most cases irremovable.
The following methods are used to determine the amount of accumulated wear:
Sales comparison method;
Life time method;
splitting method, etc.
When applied sales comparison method: the amount of accumulated depreciation is determined as the difference between the replacement cost and the cost of analogue buildings at the date of assessment.
The sequence of actions for the sales comparison method:
Identification of sales prices of objects comparable to the valued;
Spreading the total value of comparable sales between the property and the land;
Calculation of the cost of reproduction of a comparable real estate object;
Determining the amount of depreciation by subtracting from the cost of reproduction the value of the market value attributable to the property;
Calculation of wear as a percentage;
Determination of the average cumulative depreciation prevailing on the market, comparable to the object being evaluated, by calculating the weighted average.
Lifetime method is based on a visual inspection of the building and is based on the appraiser's experience and judgment. When applying the economic life method, accumulated depreciation is calculated as a proportion of the replacement cost, determined by the ratio of the effective age to the economic life. This provision is reflected in the formula:
NI / PSV = EV / SEZH = EV / (EV+OSEZH), (3)
SEZh - the term of the economic life of the object.
The economic life of a property (SEZH) is the time period during which the property can be used, making a profit during this period, improvements contribute to the value of the property. The economic life of an object ends when the improvements made do not contribute to the value of the object due to its general obsolescence.
The effective age (EV) is the age based on the assessment appearance and technical condition, economic factors affecting the cost of the object. The effective age corresponds to the actual condition of the object and takes into account the possibility of its sale. If after overhaul a brick house that is 80 years old looks as if it were 15 years old, then the effective age of that house is 15 years old.
The remaining economic life of the building (OSEZH) is the period from the date of assessment to the end of the economic life of the object. Refurbishment and modernization of the facility extends the remaining economic life. A change in investment activity in a given sector of the economy can significantly reduce the economic life of an object.
The term of the physical life of an object is the period of time during which the building exists. The term of physical life ends when the object is demolished. Depending on how the building has been maintained, whether repairs, upgrades or refurbishments have taken place, the effective age of the building may be more or less than its physical age. Chronological age is the period that has passed from the day the object was put into operation until the date of assessment.
Modified method of economic life is more accurate, but does not take into account the loss of value due to the wear of short-lived elements, but takes into account the removable physical and functional wear. When applying this method, the cost of all removable items of physical and functional wear is first determined, and then this value is subtracted from the replacement cost.
Removable wear is taken equal to the costs (repair) for its elimination, and irremovable wear is taken equal to the ratio of the effective age of the object to its economic life, multiplied by the cost of building a new object, reduced by the amount of removable wear:
NI \u003d I device + (EV / SEZH) X (PSV - I device), (4)
where NI is the accumulated depreciation of the property;
PSV - the total cost of the reproduction of the object;
EV - effective age of the property;
SEZh - the term of the economic life of the object;
And devices - removable wear.
Stakeout method determines separately the value of each component of accumulated depreciation, which include:
correctable physical deterioration (deferred repair);
irreparable physical deterioration;
correctable functional wear;
irreparable functional wear;
external (economic) wear.
Correctable physical wear and tear occurs due to poor maintenance (which is why it is called deferred repair). The typical buyer is expected to make immediate repairs to restore the building to normal operating performance. The amount of deferred repair is determined based on the cost of restoring the normal operating characteristics of the building or structure. This assumes that the elements are restored to a new or almost new condition.
The basis for calculating the deferred repair, as a loss in the cost of new construction, is the degree and amount of damage. In this case, the measurement of the degree of damage as a percentage of the cost of creating a new element is performed by comparing the actual signs of damage with the list contained in the relevant regulatory documents.
When determining deferred repairs as the amount of repair and construction work to eliminate damage, one should take into account the entire range of work that needs to be completed as of the date of assessment using the current estimated standards for repair and construction work.
Irreparable physical wear and tear corresponds to positions that are currently practically impossible to repair or economically unreasonable. Irreparable physical wear and tear is determined on the basis of the difference between the full replacement or replacement cost and the amount of correctable physical wear and tear. For the purposes of calculation, structural elements that have irreparable physical wear and tear are divided into long-lived and short-lived.
For long-lived elements, the expected residual life coincides with the residual economic life of the entire building or structure (foundation, non-existent walls, capital floors, etc.). Short-lived elements have a lower residual economic life than the entire building, therefore, during the service life, their periodic replacement is provided.
The normative periods of operation of buildings and structures are adopted in accordance with the recommendations on the frequency of preventive maintenance. For short-lived elements, depending on the unfavorable operating conditions, these periods can be reduced by up to 30%.
The amount of irreparable physical wear in short-lived elements is determined as the difference between the full replacement or replacement cost of the element and the amount of correctable physical wear of the element; multiplied by the ratio of the actual age to the total physical life of the element.
The amount of irreparable physical wear and tear in long-lived items is calculated as the ratio of the actual age to the total physical life, multiplied by the residual replacement or replacement cost of long-lived items.
Correctable functional wear is caused by:
deficiencies requiring the addition of elements;
deficiencies requiring replacement or modernization of elements;
"superimprovements".
Deficiencies requiring the addition of elements are caused by the absence of those elements in the existing structure, without which the structure cannot meet modern market standards. A quantitative measure of correctable functional wear due to deficiencies requiring the addition of elements is the difference between the cost of installing the required elements at the time of assessment and the cost of installing the same elements if they were performed during the construction of the object of assessment.
Deficiencies that require replacement or upgrading of elements are caused by the presence of elements in an existing facility that still perform their functions, but no longer meet modern market standards. Correctable functional wear due to items that require replacement or upgrading of elements is measured as the replacement cost of existing elements minus the physical wear and tear associated with them, minus the cost of returning materials, plus the cost of dismantling existing and plus the cost of installing new elements. At the same time, the cost of returning materials is determined on the basis of the disposal cost.
"Super-improvements" include characteristics and elements of the structure, the presence of which is currently inadequate to modern requirements of market standards. Correctable functional wear due to the presence of "superimprovements" is measured as the current replacement cost of the elements of the "superimprovements", minus the physical wear and tear associated with them, plus the cost of their dismantling, and minus the return of materials, if any.
If a replacement cost is used in the cost approach, then there are no "superimprovements" when determining correctable functional depreciation, therefore, there is no need to determine the share of physical depreciation attributable to them. At the same time, the cost of correcting "superimprovements" must be taken into account.
Irreparable functional wear is caused by:
Shortcomings due to items not included in the replacement cost, but which should be in accordance with modern standards;
Disadvantages due to positions included in the replacement or gapping cost, but which, in accordance with modern market standards, should not be;
- "superimprovements".
The calculation of irreparable functional wear due to imperfections does not depend on whether replacement or replacement costs are taken as a basis.
Irreparable functional depreciation due to items not included in the replacement cost is measured as the net loss of income referred to these items, capitalized using the capitalization rate for buildings, minus the cost of these items if they were included in the cost of new construction.
Irreparable functional depreciation due to items that are included in the replacement cost, but which should not be, is measured by the current replacement or replacement cost, minus the physical wear related to them, minus the present value of the additional costs associated with the presence of this item.
The sequence of calculation of irreparable functional wear due to "superimprovements" is determined depending on the type of cost that is taken as a basis.
In the case of replacement cost, irreparable functional wear due to "superimprovements" is measured as the replacement cost of the elements of the "superimprovement", minus their physical deterioration, plus the present value of the owner's costs associated with having the "superimprovements", minus any value added. At the same time, the costs of the owner include additional taxes, insurance, maintenance costs, communal payments, and added value includes increased rent and other additional payments associated with the presence of "superimprovement".
The replacement cost does not take into account the cost of building "super-improvements", therefore, their physical wear and tear is not taken into account. However, items such as additional taxes, insurance, utility bills must be taken into account.
To determine the amount of external (economic) depreciation, two methods are used:
The method of capitalizing the loss of income attributable to an external impact;
A method of comparing sales of similar objects with and without external influences.
The use of income loss capitalization involves determining the income loss of all real estate due to external influences. The proportion of losses attributable to the building is then capitalized using the capitalization rate for buildings.
The total amount of accumulated depreciation of a building or structure is determined as the sum of depreciation values for all breakdown items.
Estimation of the cost of the land plot.
In the context of the formation and development of the land market, the issue of assessing the market value of land plots, which is determined during an individual assessment as part of the cost approach to real estate valuation, becomes relevant.
An individual assessment is carried out at the request of an interested person (site owner, potential buyer, investor, creditor, insurer, etc.) in the most optimal way for a particular case. This estimate is very specific and may differ significantly from the results of the cadastral valuation.
Currently, the procedure for individual assessment of a land plot is regulated by federal law dated July 29, 1998 No. 135-FZ "On valuation activities in the Russian Federation" and "Methodological recommendations for determining the market value of land plots", approved by order of the Ministry of Property of the Russian Federation dated March 6, 2002 No. 568-r.
Assessment, according to methodological recommendations, is a set of ordered (regulated) actions of an appraiser, including the collection and analysis of initial data, the applicability of the entire set of approaches and methods of assessment for a particular object, a series of calculations and examinations of the results to obtain an opinion on the value of a land plot.
The purpose of the land valuation is a conclusion on the type and value of the value of the valuation object in monetary terms on the date of the valuation in accordance with its purpose. The purpose of land valuation is to carry out certain financial transactions or entrepreneurial transactions with land. The purpose of the evaluation is the customer's goal.
The most typical cases when there is a need for an individual assessment of the land:
Purchase and sale, exchange of land, donation;
Transfer of land for rent;
Land valuation for the purposes of development and development (development, modernization, etc.);
Valuation of land for the purposes of consuming its exhaustible resources;
Mortgage lending - valuation of land to use it as collateral for loan obligations;
Insurance - assessment of destructive impact factors in terms of their possible impact on land value reduction (flooding of the territory, environmental pollution, etc.);
Taxation - calculation of the values of the property tax according to the relevant methods and standards;
Confiscation - in this case, both the one who is confiscated and the one who confiscates must receive real data on the value of the land for negotiating or submitting to court;
Business valuation - valuation of a land plot that is part of a property complex;
Shareholding - this process should be considered as the sale of a land plot (or part thereof) by a shareholder;
Merger, division of property, part of which is the assessed land plot;
Contribution of a land plot to the authorized capital of a newly created or reorganized enterprise;
Investment;
Introducing the right to use land in the authorized capital of the enterprise;
Determination of damage caused to land users as a result of land withdrawal for state or municipal needs;
Other purposes that do not conflict with applicable laws and regulations.
This list is not exhaustive, but, nevertheless, gives an idea of the significant increase in the significance of the results of land assessment and the expansion of their scope.
Depending on the purpose of the land plot appraisal, the appraiser determines the appropriate type of value and selects the tool by which this value will be determined, that is, one or another approach to the object appraisal.
Thus, the methodological basis for the individual assessment of land plots are " Guidelines to determine the market value of land plots", according to which the appraiser is obliged to use the cost, comparative, income approaches to the assessment (or justify the refusal to use). Within each of the approaches, specific methods of assessment are proposed.
The sales comparison method, the allocation method and the distribution method are based on the comparative approach.
The income approach is based on the method of capitalization of land rent, the residual method, the method of intended use.
The cost approach is not applied when assessing a land plot free from improvements, since no costs were required to create the land. But elements of the cost approach are used in the residual method and the allocation method when evaluating a built-up land plot.
Each of the listed approaches and methods has its own advantages and disadvantages, scope. The application of this or that method depends on the specifics of the object of assessment, the volume and reliability of the initial information and other factors.
Among the methods of a comparative approach to valuation in practice, the method of comparing sales is most often used: (subject to the development of the land market). In the case of applying this method, the appraiser first identifies a number of actual sales of land plots similar to the property being assessed in terms of a set of indicators, including workshop use, collects the necessary comparative information for the selected analogues (sales price, value rent and etc.). The transaction information is then reviewed for use in the valuation process to ensure that it is accurate and reasonable. Finally, correction factors are introduced into the prices of analogous objects, taking into account the differences between the object of assessment and each of the comparable objects.
As practice shows, the sales comparison method gives unsatisfactory results in conditions of high inflation rates, with a lack of data on market sales of similar properties or their low reliability, as well as with sharp changes in economic conditions.
The allocation method is used in the assessment of built-up land apprentices. The market value of a piece of land is determined by subtracting from the market value of a single piece of real estate the cost of reproduction or the cost of replacing existing land improvements. At the same time, the market value of a single property is determined by the sales comparison method.
The distribution method is based on the principle of balance or contribution, which states that for each type of property there is a normal ratio between the value of land and the value of buildings. It is used in the assessment of built-up land plots. The market value of a land plot is determined by multiplying the market value of a single movable object (BON) by the most probable share of the land plot in the market value of the BON. At the same time, the market value of bonds is determined by the method of comparison of sales. This method does not give an exact value of the market value, but it can be used for an approximate assessment in the absence of information about the sale of vacant land. To apply the method, reliable statistics on the proportional ratio of land and improvements for a particular type of property in the local market are required. Therefore, if there are not enough comparable sales in the region where the property is located, then you should look for similar regions and determine typical relationships between the value of land and total cost property in these regions, and then apply this ratio when analyzing the sales of plots that will serve as the object of comparison in the region being assessed.
The method of capitalization of land rent is based on the principle of expectation, which says that the value of real estate is determined by the value of the future benefits of its owner. The assessment of the cost of a land plot by this method is carried out by converting cash income from the use of the land plot to the current value using the capitalization ratio. The capitalization ratio (rate) is determined based on market data on net operating income and the value of a number of comparable land plots.
The cost of a land plot (R land) is determined by the formula:
P earth \u003d CHOD earth / KK earth, (5)
where CHOD land - net operating income from land for the year;
KK land - coefficient (rate) of capitalization for land.
The residual method is used in practice to estimate the value of a land plot in cases where the cost of improvements is known, as well as the requirements for a certain amount of profitability of land and improvements.
The residual technique for land is based on the application of two approaches - costly and profitable. The essence of the residual technique for land is to capitalize the income attributable to the land while the value of the property built on it is known. The application of the residual technique for land assumes that the cost of a building (structure) can be determined quite accurately.
The intended use method is used to value built-up and non-built-up land. The condition for applying the method is the possibility of using the land plot in a way that generates income.
The method involves the following sequence of actions:
Determining the amount and time structure of expenses necessary for the use of the land plot in accordance with the option of its most effective use(for example, the costs of creating improvements to a land plot or the costs of dividing a land plot into separate parts that differ in forms, type and nature of use);
Determining the amount and time structure of income from the most efficient use of land;
Determining the amount and time structure of operating expenses necessary to receive income from the most efficient use of the land;
Determining the value of the discount rate, corresponding to the level of risk of investing capital in the assessed land;
Calculation of the cost of a land plot by discounting all income and expenses associated with the use of a land plot.
Advantages of the cost approach:
1. When evaluating new objects, the cost approach is the most reliable.
2. This approach is appropriate or the only possible one in the following cases:
Feasibility study of the cost of new construction;
Justification of the need to update the existing facility;
Evaluation of buildings for special purposes;
When evaluating objects in the "passive" sectors of the market;
Land use efficiency analysis;
Solution of object insurance problems;
Solving problems of taxation;
When agreeing on the value of the property obtained by other methods.
Disadvantages of the cost approach:
1. Costs are not always equivalent to market value.
2. Attempts to achieve a more accurate assessment result are accompanied by rapid growth labor costs.
3. The discrepancy between the costs of acquiring the property being valued and the costs of new construction of exactly the same object, because accumulated depreciation is subtracted from the construction cost during the appraisal process.
4. Problematic calculation of the cost of reproduction of old buildings.
5. Difficulty in determining the amount of accumulated wear and tear of old buildings and structures.
6. Separate assessment of the land plot from buildings.
7. Problematic evaluation of land plots in Russia.
