What is my property worth in Halifax?
If you own residential or commercial property in Halifax, you must know its value in order to determine relevant expenses, such as the price you’ll need to pay for property insurance. The process of determining property value is called property cost evaluation.
The initial step in evaluating your property is to gather all relevant information about it that could influence its value. The lot size and building dimensions are obvious factors, but it’s also important to consider other relevant financial data, such as the cost of municipal and school taxes. There are also numerous subjective factors that can have a major impact. For instance, the architectural style of a building may influence its value. The location of the property, local zoning records and demographic information can likewise affect a property’s value.
Information about a property can be analyzed via three different methods: market approach, replacement cost and income potential. Experienced property appraisers know which methods are the most relevant for each situation.
• Market approach
An effective way to analyze this data is to compare the property in question to similar properties in the neighbourhood that were recently sold. After all, demand can have a dramatic impact on property values. By comparing the sales of at least three similar properties to the one being appraised (and then making minor adjustments to take differences into account), it’s possible to establish the market value.
• Replacement cost
Another way to determine the value of a property is to figure out what it would cost to rebuild it, and then deduct depreciation. In order to determine the replacement cost, you need to have access to the cost of all relevant building supplies as well as labour costs. This method can be quite complex; a floor plan for a home could cost $150 per square foot or $300 per square foot, depending on the quality of the workmanship and the choice of materials.
• Income potential
The third way to evaluate property value is to estimate the property’s potential to generate income. This type of analysis is especially important for commercial properties, such as office space, retail space or hotels. Investors can calculate the capitalization rate (return on investment) for a property by dividing the net operating income by the price of the property.
If you’re researching insurance companies in Halifax please consider Eisenhauer Insurance. Our experienced insurance brokers are very familiar with all of the steps involved in purchasing property insurance in Halifax. Contact us today to get a free quote on insurance for your residential or commercial property.