Property evaluation

Sep 10, 2022
These are the evaluation processes and determining the strategic importance of real estate at the near and long level, in addition to estimating the current value of the market and the expected value for the coming years, as well as what is characterized by the real estate from the area and location at the present time and in the future.

The company prepares reports in accordance with approved international standards and specifications.
Methods of evaluating real estate in Kuwait:
The current real estate market is witnessing a number of diverse and different evaluation methods, and we can list them here as follows:

Methods for determining the value of the property:
• Sales comparison method.
• Cost calculation method.
• Method of assessment based on income.
They are in detail:

Sales comparison method:
It is a set of procedures in which the value index is extracted by comparing the property under evaluation with similar properties that were recently sold, and by applying appropriate comparison units and making adjustments to the selling prices of the properties being compared based on the elements of comparison. This method is used in particular to evaluate residential properties, including homes and apartments, to determine the value of the sale, where the evaluator studies many factors affecting the property, the most important of which are: the location of the property (main street, secondary, commercial, public, private), the condition of the property, the age of the building, its conditions and privileges, as well as the specifications of the property. Its area, the level of internal and external finishes, as well as the history of sales operations that usually play an indirect role, as well as the local conditions for sale (natural, emergency, market conditions and quantities of supply and demand). This method is considered one of the most common methods in Kuwait.

Costing method:
It is a set of procedures by which the real estate value index is extracted by evaluating the current cost of constructing another building or an alternative similar to the existing one, deducting the depreciation due from the construction cost and adding the estimated value of the land in addition to the contracting profit. After that, adjustments can be made to the value of the full ownership shown. The property in question to reflect the value of the property being valued.
This method depends on the following points that must be taken into account when evaluating the property:
1) Evaluate the price of the land (as if it were devoid of construction) to determine the best use of it.
2) Evaluate the current construction cost.
3) Damage assessment (maintenance cost)
4) Current construction value = current construction cost - maintenance cost.
5) The valuation price = the valuation of the land price (as if it were devoid of construction) + the current construction value.

Method of assessment based on income:
This method depends on calculating the revenues resulting from the rental of real estate that generates a material income if it is for residential rental, and this percentage varies according to the status of the property, and it may be acceptable to an investor and not acceptable to another investor, and in light of this ratio, the value of the property is determined.


This method is based on five main points:
1) Assessment of total total intake.
2) Determine the percentage of vacancies.
3) Determining the value of the total operating expenses for workers and maintenance.
4) Determine the net income value.
5) Calculate the percentage of income on the price of the property.
However, the most important element in this type of assessment is how to determine the net income, and this method is most often used in rented buildings: residential - commercial - markets - shops, that is, those that generate a material income.

The company is approved by the Ministry of Commerce under registration No. (9) based on Ministerial Resolution No. 182/2010 regulating the profession of real estate residents in the State of Kuwait issued on June 6, 2010 and Ministerial Resolution No. (417) of 2010.
The company is approved by the Kuwait Finance House as a certified real estate appraiser, and the company has evaluated about 500 properties for the benefit of the Kuwait Finance House within four months
The company was also approved by Kuwait International Bank.
The director of the company is one of the founders of the Kuwaiti Union of Real Estate Evaluators.

The beneficiaries of the evaluation:
• Heirs (for the exit of one of the heirs).
• Banks (especially mortgages - real estate finance).
• Law offices (all disputes between property owners).
• Accounting offices (for the work of preparing budgets).
Minors’ affairs (for evaluating the heirs’ real estate).
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