Thursday, December 14

Market Value. Utility Value And Investment Value

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Market value. Utility value and investment value

Utility value

      Utilitaze value is a concept based on the productivity of an economic good. Utility value is the value that a specific property has for a particular utility. Utility value is fixed to the value of a property that now contribute to the (business) which is part of the composition, without taking into account the best use of property or the amount that can be obtained from the sale. Utility value depends on external conditions and property management.

      Utility value will be estimated in real estate valuation for merger, acquisition or issue of securities.

      In assessing the types of properties that do not usually do not rent or sell, it becomes difficult to decide what is appropriate to assess: the market value or end value. Such real estate properties with limited market are known and are properties that have relatively puţinin buyers at a time (large factories, properties near the railway, the property research – development). Many such properties have unique structures, special construction materials or design that restrâge use only original destination. These properties have a limited potential for conversion and they are usually called special purpose properties (houses of worship, museums, schools, public buildings, clubs).

      The value of continuous use is the value for a verified operating real estate.

It includes additional value associated with business continuity, ie that increase business intangible value that is produced by the combination of land, buildings, labor, equipment and operation of the market. The value of continuous use of a property-based business refers to the total value of the property which includes property and intangible property related to business value.

      Estimating the value of continuous use is recommended for hotels and motels, restaurants, bowling alleys, industrial enterprises, shops, shopping malls and other similar properties. For these types of properties will be difficult but not impossible, to separate the market value of land and buildings to the overall business value.

      Investment value

      While the usefulness refers to the specific use of property, investment value is the value of certain investments to a particular investor, based on the requirements of the investment.

      Investment value reflects the subjective relationship between a particular investor and an investment time. When expressed in a monetary unit of investment value is the price an investor would pay for an investment in light of its ability to perceive that investment.

      Investment value is useful for a potential buyer of an existing investment or income-producing real estate property or a person interested in developing real estate.


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