For those that invest in real estate, there is a lot to learn about commercial property value and how it will impact your financial success. Not everyone will be able to turn a profit like CEO Aubrey Ferrao, whose property development company is one of the most successful in Southwest Florida. Though you might say that Aubrey Ferrao has the golden touch with investment properties, it more about knowing a good piece of property and recognizing how to extract value through development potential. To get to this point, you need to understand the commercial appraisal process.
More Than an Inspection
It could take several hours to appraise the physical property, but the appraiser will also look into zoning records, public ownership, local demographics, replacement cost, and comparable sales. The whole report will become an appraisal.
Your appraisal will be wary of what you try to present concerning the property, so always be honest and transparent when answering their questions. The appraiser will look for ways to prove or disprove what has been said in order to support the findings on the report, so start off on the right foot.
Strict Ethical Codes
An appraiser is required to provide an unbiased opinion of the property, following the codes laid out by the Uniform Standards of Professional Appraisal Practice. If an appraiser doesn’t make an adjustment or do something you request, it could be that disciplinary action could happen since it violates the code of ethics.
Property Interest Appraisal
Your intentions for the property can impact the overall value, but not at the time of purchase. You want to know what the property would be worth if occupied by tenants (a leased fee interest) or the value of the building and the property (fee simple interest).
Knowing the potential of your property will guide you as assess the value of the asking price for the property. The appraisal can help get you to that point, so long as you understand how commercial appraisals work.