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Estimating Sheet

Learn to determine the existing value of a building

Construction Software

This is another useful presentation from S.L.Khan, the renowned engineer. In this video, one can learn the methods for determining the value or price concerning a property like building, factory, other engineering structure and land.

Given below, the details of methods which can be used to determine the value :-

1) Rental Method
2) Profit Based Method
3) Depreciation Method
4) Direct Comparison Method ... etc.

In this video, brief explanation is given on the rental method to find out the existing value of a building or property.

This method involves the following useful formula :-

Present Value = Net Rent x Year Purchase
Net Rent = Annual Gross income – out goings
Year purchase = 1/ rate of interest.

Out goings relate to the costs associated with municipal tax, property tax, insurance tax, other miscellaneous charges etc.

In the video, the solution is given on the following problem :-

Problem: Determine the existing value of a newly developed building. Gross rent of this house is $ 11000 / month.

Suppose, outgoings is 14% of gross rent. Select rate of interest is 7% and future life of building is 70 years.

To find the solution, go through the following video tutorial.

Video Source: SL Khan

Learn to determine the existing value of a building