25/07/2026
Before you buy or sell, know how professionals value property. 🏡
Property valuation isn't just about location. Professional valuers use 5 different valuation methods, and each one is designed for a specific type of property and purpose.
1. Sales Comparison Approach
Compares recent sales of similar properties to estimate market value. Best for residential and standard commercial properties.
2. Income Approach
Values a property based on the rental income it generates. Ideal for apartments, offices, and shopping plazas.
3. Cost Approach
Calculates the cost to rebuild the property, subtracts depreciation, and adds land value. Commonly used for new or specialised buildings.
4. Residual Method
Estimates land value by calculating the future value of a completed development minus all development costs and developer profit. Best for development land.
5. Profits Method
Values properties based on the business profit they can generate rather than just the building itself. Used for hotels, restaurants, cinemas, and similar properties.
The right valuation method depends on the property not the valuer.
Understanding these methods can help you make smarter real estate decisions and avoid costly mistakes.
