If you’re involved in the sale or purchase of a commercial property, the amount of money you stand to spend or make will be at least partially determined by an appraisal. This appraisal involves a third-party professional inspecting the property and considering a number of factors to determine a fair value.
This number will not necessarily be the final sale price, but it will be an important part of the process. Here are some of the factors the appraiser will consider:
Location
Everyone has heard the cliché about how important location is when it comes to real estate. But what determines a good location? When it comes to commercial real estate, there are a few considerations to make. There are negative factors such as high crime rate, proximity to train tracks and powerlines, and the unkempt appearance of neighboring properties that can hurt the value of your property.
The appraiser will also consider what the public transportation in the area is like, how easy it is for vehicles to go in and out, what kind of foot and vehicle traffic the area gets, whether or not it’s located at a four-way intersection, and what kind of businesses surround the property.
Size/Facilities
The size of the building and of the property in general will obviously be a major factor in the appraisal, but the facilities will matter too. Is the building well-equipped to provide what a tenant or potential buyer wants? For example – a building full of luxury condos probably isn’t a great fit for a neighborhood with primarily lower middle class income earners.
Aesthetics, Maintenance, and Potential
Good aesthetics will help the property make a good first impression and vice versa. Does the exterior appear dated? Are the lawn and landscape well maintained? What kind of shape is the parking lot in? Meanwhile, any deferred maintenance will harm the property’s value, as the buyer will know they’ll have to spend a lot to handle that issue in the near future.
The exact value of a property’s potential is a bit harder to nail down, but certain developers may see the need for maintenance as an opportunity to renovate and add value to the structure. The potential for redevelopment and expansion can also be attractive to potential buyers, adding further value to the property.
If you have a commercial property in or around Auburn, AL that’s in need of appraisal, Atlas Valuation is the place to go. Our specialists have experience in a wide variety of commercial real estate appraisal. Call 334-737-6993 to get started today!
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