For the sale & lease of property in Bahrain, it is important to understand the meaning of property valuation and the methods of valuation recognized under the legal purview in Bahrain. Homeowners need to learn the valuation processes to get a fair deal while investing or selling property in Bahrain.
What is a property valuation?
The term property valuation refers to the process of evaluating property to determine its fair market value.
Why is the valuation of property important?
Calculating the commercial value of the property becomes important to the buyer and seller because it ascertains a fair price for both parties.
In other words, it helps the buyer and seller to settle at a rate that is reasonable and acceptable to both parties.
Also, evaluating the property is necessary for payment of taxes and for securing loans and mortgages on the property.
Good property management companies like Iris Property Managers in Bahrain offer professional property valuation services in the Kingdom.
What determines the value of property?
Many factors determine the value of property in Bahrain. It is important to understand these factors to assess fair market value.
Location of property: One of the key factors affecting the assessment of property is the location of the land and building. The value of houses for sale in Bahrain will change depending on the locality.
Proximity to hospitals, schools, and retail centres are just some of the factors that affect the value of the location.
Physical characteristics of land or building: Another determining factor is the physical characteristics such as property measurements and incase of building, the architecture and design will also influence its value.
Demand and supply for real estate in the country: Additionally, the current overall demand and supply for real estate in Bahrain is an important factor that determines the evaluation of property.
Economic indicators: Economic indicators such as interest rates also affect the worth of property.
Methods of valuation of property
Real Estate Regulatory Authority (RERA) Bahrain governs the methods of evaluating property in Bahrain.
Assessing the value before the Sale and Leasing of property in Bahrain must be done in accordance with Bahrain Valuation Standards 2019 and in case of ambiguity, must be read in accordance with the International Valuation standards.
Sales Corporation Method
A common method of evaluating property in Bahrain is through the sales corporation method. Residential and houses for sale in Bahrain are usually valued through this method.
In this method, the worth of the property is measured in terms of properties that have been recently sold in the same location. So, what does the sales corporation method consider to determine this value? This method considers the depreciating value of the property, the location also plays a key role.
Cost Approach valuation method
Another method of evaluating property is through the cost approach. Here, you consider the cost of replacing the building with a similar one. Also, while calculating the cost, the total cost of land, plus the cost of constructing a new similar building, minus the depreciation value will be considered.
Income capitalization method
The income capitalization method assesses the value of residential buildings that generate income.
The potential returns from the property determine the value of the property.
Technology and Valuation of Property in Bahrain
Bahrain has always been at the forefront of adopting the latest technology in various services. Property management now employs new computer-based tools like Geographic Information Systems to evaluate property.
Conclusion
Summing up, property evaluation is important for determining a fair value for the sale and leasing of property. Iris Property Managers one of the best property management companies in Bahrain offers fair market prices for all our properties.
Over the years we have harnessed the potential to remain one of the best real estate companies in the Kingdom. Our expertise in real estate has enabled us to tap into multifold avenues of property management including facility management and homeowner’s association management in Bahrain.
At Iris Property Managers, we ensure that our customers are more than satisfied with the services we provide. Our wealth of expertise in real estate has helped us to become one of the leading real estate agents in Bahrain.