LWK

Why you should get your commercial property valued? Ultimate guide 2022

A commercial valuation will give an estimate of what the property would sell for in an open market. This helps inform the owner during negotiations on price. There are other reasons to value your commercial property, such as collateral or ascertaining how an asset will perform as part of a real estate portfolio.

Why should you value your commercial real estate?

Valuing your commercial property is important for several reasons.

Firstly, understanding what a fair market rate is, allows you to assess risk. This is especially important if you are looking to purchase additional commercial properties.

Another reason to value your commercial premises is that it’s an asset. It is important for underwriting purposes and can be used as collateral in a bank loan or a mortgage.

How to estimate your commercial property value?

Commercial valuations are substantially more complex than their residential counterparts. Residential real estate is valued by size, age, location and desirability. Commercial real estate can be valued in a number of ways, but often it’s calculated on the amount of rental income the property can theoretically generate per year.

Once a rental level has been established, a level of risk in terms of a percentage is applied to the current/forecasted rental income. The percentage which is applied is called the All Risk Yield (ARY).

The rental income is then divided by the applied yield rate. The remaining % amount is what investors would expect to see as a return annually, and this returns the property value.

The best rule of thumb is to employ a commercial estate agent, such as LWK based in Dublin. A commercial estate agent such as LWK will be able to not only provide a granular valuation, but will also be able to talk about the next steps in terms of selling the property or retaining it as a collateral asset.

How to value development land?

Much like commercial property, development land in Ireland has many different quantifiable metrics. It’s equally as important to use an expert in commercial real estate when determining land value.

Although it’s possible to value commercial land yourself, an estate agent may invariably have the information you do not.

A good example would be if planning permission were granted on land near yours for a shopping centre. This may well impact the worth of your land in the future.

The reverse side of this is if planning permission had been approved for an entertainment venue where a lot of noise could potentially travel. This may then decrease the value of the land and result in the agent advising a quicker sale.

Many factors determine commercial property value. Some of these factors are fixed. Others are changeable. It is the job of a commercial real estate agent to relay these to you and assist you in receiving the maximum price for your asset.

If you would like to book a valuation on your property, please contact us today.

How does a commercial valuation work?

Ordinarily, the first step in a commercial valuation is calculating the annual rent rate. This can differ depending on the status of the property market.

Once an annual rental level has been established, a level of risk in terms of a percentage is applied to the current/forecasted rental income. As we have mentioned above, the percentage which is applied is called the All Risk Yield (ARY).

The rental income is then divided by the applied yield rate. This leaves the % amount investors would expect to see as a return annually, and this returns the property value.

What is a desktop commercial property valuation?

A desktop valuation is done remotely. It’s usually software-driven. Your agent will ask you questions and then input this information into the software.  The software will provide an estimate of property or land value.

Ordinarily, a desktop valuation is used for lower-risk lending. In most cases, a desktop valuation would only be suitable for loans where the Loan to Value (LVT) level was below 80%

Contact LWK for a free desktop commercial valuation.

What is a full commercial property valuation?

A full valuation involves an evaluator going on-site and inspecting everything. This includes the building’s structural integrity, electrics, plumbing, size, location and utility.

This is a lengthier process but gives a much more accurate picture of what the property could be sold for in the current market.

If you need a full valuation of your land or property, contact the team at LWK.

Are there commercial real estate agents in Dublin who offer free commercial valuations?

In a word, yes! LWK will offer a free comprehensive commercial valuation of your property or land. If you require a free valuation, then please get in contact with one of the team.

If you require a valuation for a purpose other than selling the property, it will likely have a cost. The fees differ between commercial estate agent firms. They depend on whether you need a “desktop valuation” or “a full valuation”.

If the purpose of the sale is probate, some commercial estate agents in Dublin offer a free commercial valuation such as LWK.

Commercial real estate agents Dublin

Selling property or land can be a stressful experience. Whether you’re selling up or re-investing, you need an estate agent who is on your side.

At LWK, we strive to offer support and advice.

LWK has helped countless property owners sell their properties at the best possible market rate. LWK offers a comprehensive and full valuation of your asset.

If you would like to speak to us here at LWK about your property, get in touch today, and a member of staff will be happy to help!

Share:

More Posts

Selling a house in Ireland | Sellers toolkit

When selling a property in Ireland, there are many things to consider. Depending on the circumstance. Ideally, a seller is motivated by financial factors such as the best time of year to sell, market pressures or a strong euro

Is now a good time to sell property?

Yes, according to the Bank of Ireland economic pulse from October 2022 found that 68% of people think it’s a good time to sell. Coupled with record low housing availability and high base rents

Send Us A Message