2. Valuer are obliged to give explanations about the reasons for the use of cost approach
3. Calculating the cost to determine the value of property in the cost approach can be done through two techniques, namely: • Reproduction costs, taking into account the cost of the price now, which is required to make a duplicate or a replica of the object by using an evaluation of materials, construction standards, design, layout (lay out), and the quality of the same object with the assessment and • Replacement cost, by considering the cost in the price now, which is required to make the replacement of the object by using an evaluation of materials, construction standards, design, layout (lay out), and quality that have been adjusted to the conditions during the assessment process.
4. The use of techniques to determine the cost calculation of the value of property in the cost approach, mandatory use consistently during the assessment.
5. The cost approach is prohibited to be used to make an evaluation on, among others: Owner Rights BOT; Unit property with the status of the strata title; assessment of land; Rating vehicle; Rating and lease hold property.
6. Things must be done in assessing the cost approach, including: Calculating reproduction or replacement cost of the New (or Reproduction Cost Replacement Cost) per property special assessment of real property, personal property and / or built or installed above ground The votes; Building-building built over the land assessed; complement other facilities built over the land assessed, and machinery and equipment that was installed above ground are considered. Reproduction or reduce the cost of replacement with the amount of depreciation that is to generate value objects indication other than the assessment of land and add value to land value indication in the assessment of objects other than to get an indication of land value based on the cost approach.
7. The calculation of cost or replacement of New Reproductive New to the building by using one of the following methods: Quantity Survey Method; quantitative survey method is a replica of the bidding contractor development. Estimation of this cost calculation unit and total costs, estimation of the benefits to owners or developers of the cost directly and indirectly.
• Quality and quantity produced by this method should be the same from all the building materials used in construction and all categories of workers.
• Estimated total cost of building materials and labor. Total cost is the cost per unit plus the cost of unexpected, additional costs and benefits.
• explain in detail about the building materials, labor, additional costs and benefits.
a) Unit In Place Method;
Methods Unit mounted a unit-cost units for various components connected to the main building based on the standard cost for the building structure components.
b) Comparative Method-Unit; and
Comparison method applied to calculate the cost estimates in the currency units per unit of volume or wide. This method is the method used to calculate the estimation of the value of the object assessment, based on the cost of comparable properties. make adjustments, in terms of property and an assessment of different object location. Calculating the cost of the dimensions of the building soiled units per m2. To estimation by comparing the total cost of the item assessment of the property comparison. Comparing the cost trends between the date of the contract (construction) and the effective date. In this trend price contract, the total cost of building that can be reduced (extraction) from the sale of comparable properties or new buildings throughout the meet as follows: Improving the moment has been prepared to meet if the property; Property has been stable; balance between demand and supply; Value of property can be known. the selling price of each property values reduced the value of comparison indicates that the remaining cost increase of the value of the object to know the assessment. Made adjustments in the event that there is a difference between the object and property assessment comparison. Valuer are obliged to calculate the cost of comparable units from the increase of unit costs, or adjust to variations in size, shape, resolution and other characteristics. The unit cost must disclose any changes related costs between the date of the recording unit cost comparison and the date of assessment.
c) Cost Indexing Method
Cost Index method applied by multiplying the cost of known or ought to know the number with an index that is based on the increase in the price index for building materials and the wages of workers, which is based on the difference in time between the date of assessment and the date when the calculation of the cost done.
8. Depreciated Replacement Cost Method
a) Applied rate to the assessment object, in the case of other methods in the cost approach can not be used.
b) the assumption that the method used in the DRC is that the potential benefits or services that are adequate potential of specific properties if compared with the total assets and calculated in terms of public and social facilities, it must reflect the prospects and feasibility of utilization of these properties in sustainability
c) In case the replacement cost method used depreciation , Evaluation obliged to do so, at least: calculate the value of the land by using the data market comparison approach with the land as empty land; calculate the value of the building by using the approach cost calculations and add value with the value of building land to get the value of the property.
Calculate the estimation of the value of the building costs of replacing the new (replacement cost new) with the method: Quantity Surveying methods; Unit in place method; Square meter method; and Method Cost Index (Cost Indexing Method). Calculate depreciation, the property assessment, the method can be used to calculate depreciation include: market extraction method, the market extraction method can be used only if; selling price of property derived from an association The Valuers available; comparison properties used must have the same characteristics of the object assessment in terms of physical and function; and the calculation of the value of land and replacement value return (replacement cost) property comparison can be done accurately.
d) The steps to calculate depreciation costs by using the methods of extracting the market include: Getting the selling price of property from an association The Valuers ; make adjustments to the selling price of the property comparison; find the value of the property that comparison can be depreciated (depreciated cost of alerts) with a way to reduce the selling price of property comparison with the value of land property comparison; calculate the value of re-replacement (replacement cost) property comparison; calculate depreciation cost way to reduce the value of the replacement property back comparison with the value of the property that comparison can be depreciated and the cost of depreciation convert into a percentage by dividing the cost of depreciation of the value replacement of the back (replacement cost) property comparison.
e) Methods of economic age; Age actual property is calculated on the number of years since the property was established finished. Age is the effective properties indicated that the number of years with the condition and uses of the property. The period of economic (economic life) is the period since the property was established to increase (alerts) property no longer be able to add the value of the property. The period of benefits (useful life) is the period since the property was established component to the property no longer can provide the benefits. The remaining period of economic properties is estimated to reduce the age of effective properties of the total economic properties. Method economic age can only be used if the data about the economic age and the age of an effective property can be determined accurately and property comparison used must have the same characteristics of the object with the assessment in terms of physical and function.
f) The steps to calculate depreciation costs by using the methods of economic age include: Determining the age of economical and effective properties of an age; and Distributing the Age effectively with the economic age of the property comparison.
g) Method breakdown, the breakdown in the method, depreciation costs are grouped into three main parts, namely: physical setback (Physical Deterioration); factor cause physical depreciation, namely: Due to the age and condition visible. Calculate the depreciation of physical effects of age with the same effective age divided by economic age and condition of visible effects, according to the damage or repair has been done. Functional Obsolescence. Functional obsolescence due to the depreciation caused by reasons that arise from within the building but beyond the physical setback, among others: Planning, which is not good; size room that is not in accordance with the planned; use of materials that are not appropriate, and that means not be operation there, such as building high-rise no extinguisher; storied building without the emergency stairs, and use not in accordance with the original function. functional obsolescence due to the depreciation can be calculated from the cost required, so that the building work in accordance with the already planned. Economic obsolescence (Economic Obsolescence), Depreciation due to dryness caused by economic reasons arising from the outside, among other laws that apply; change its (Zoning); social and economic changes of the local community; condition that is not secure; and Conditions economy. depreciation due to economic obsolescence can be measured by, among others: the type of property that can are able to use comparative prices and sales at the time before the occurrence of economic obsolescence and at the time after the occurrence of economic obsolescence; in the case of commercial properties can be seen from the causes and magnitude of the decline income item assessment, and the property industry can be seen from the causes of the decrease in the production of objects assessment. Building market value equal to the cost of replacing the new reduced depreciation.
9. In the case of using the Evaluation Principles Analysis of the Highest and Best Use of (the highest and best use analysis) met the required conditions as follows: Highest and Best Use of the property to become the object of compulsory assessment occurred in the time not too long since the date of assessment and not speculative. Do not violate existing regulations, among its other areas (Zoning), the rules of building (The Building Permit), environmental regulations, and the period of holding the rights; Allows physically, by considering factors such as size, shape, wide, height and the contours of land; making in the financial (financial), among others, with the ability to consider the item assessment for a profit; and Generate maximum profits. to reveal the explanation and reasons for the Analysis of the Highest and Best Use of (the highest and best use analysis) in the assessment report.
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