Cost of Property Valuation

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ravi
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@ravi
Join Date: 2006
Post Count: 8
January 27, 2015 - 10:10 pm
Hi,
Just need some guidance. I am looking at a commercial rental property which is not on the market but the owner is happy to negotiate a price close to valuation.
Spoke to Bank of Melbourne to see who they use for their valuation and got a quote from their recommended valuer, who has quoted almost $1700 to conduct the valuation!
Does that sounds normal for a property worth about $320k according to council rates? If I was applying for a loan who usually pays for the valuation?
Thanks,
superAndrew
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@superandrew
Join Date: 2014
Post Count: 188
January 27, 2015 - 10:51 pm
Council rates are usually based on the land value of the property not the property as a whole including the dwelling.
Commercial property is valued using the Income approach or DCF so the valuation is a bit more complicated than the valuation of a residential property.
Do you what the net income over last 5 yeas was?
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ravi
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@ravi
Join Date: 2006
Post Count: 8
January 27, 2015 - 11:07 pm
The council rate value that I was referring to was the improved capital value.
The net income over 5 years was property around 120k, however there is no security of lease
Mick C
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@shape
Join Date: 2010
Post Count: 1,099
January 31, 2015 - 12:50 pm
Commercial bank valuations will depend on a lot of factors ( you really need to neg and shop around too)
– Lender
– Type of commercial ( Specialized/ one shop/ multiple shops/ office/ retail/ warehouse etc..)
– Cost of the transaction/purchase
– Location
– Construction or existing property
Generally bank commercial valuation can range from $800-$4000+
P.s Generally you pay…
- This reply was modified 9 years, 9 months ago by Mick C.
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Albert Waldron
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@albertusw
Join Date: 2014
Post Count: 1
January 31, 2015 - 4:57 pm
Hi Ravi,
Commercial valuations run out to around 30 pages taking into account various things like economic factors for the industry the current tenant is in, the type of security (specialised or a simple factory unit for example) and the location.
We have seen a valuation for a hotel/motel in a small country town which end up valued at just under $500,000 where the cheapest quote was $3,600
By contrast for a typical Metropolitan factory unit this would have been around $1,250
It does depend on the lender though some absorb some of the cost into the loan with a higher interest rate others simple ask you to pay the valuer directly.
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