Business Personal Property Valuation
Business Personal Property Valuation
Business personal property (BPP) can be challenging to value because of the limited quantity of data available and primary reliance upon the sales comparison approach. Relatively speaking, a voluminous quantity of data is available when valuing real estate as opposed to valuing business personal property. Many real estate appraisals consider three approaches to value: cost approach, sales comparison approach and the income approach. By contrast, most business personal property appraisals depend primarily upon the sales comparison approach. While it is possible to develop a reasonable estimate of the market value for business personal property, the values tend to be more subjective than the value of real estate. The sales comparison approach depends upon principles of substitution and supply and demand. Purchasers of business personal property will seek alternatives and choose the alternative most beneficial for them considering cost, quantity and quality. For real estate, comparable sales data is available with in-depth descriptions of the real estate, including quantity and quality. For business personal property, is more difficult to obtain accurate information regarding the quantity and quality of property involved in a sale. For example, assume the XYZ Company recently closed its Chicago operation and sold the furniture, phone system, network servers, personal computers and related items for an office with 30,000 square feet of space and 120 employees. The sales data includes the quantity of desks, chairs, file cabinets, personal computers, network computers, etc. However, it does not contain precise information regarding the condition and age of each of these items. Real estate is more homogeneous and easier to describe versus the sale of a quantity of business personal property. Real estate appraisers often gain insight from preparing each of the three approaches to value for real estate assignments. However, personal property appraisers typically focused primarily upon the sales comparison approach. They do not have the benefit of contrasting the value conclusion via the sales comparison approach with values via the cost approach and income approach. It is important to define the asset being valued. Referring back to our example of the XYZ Company which closed its office, is the assignment to ascribe a value to each item as though it is going to be sold individually or is it to assign a value to the aggregate collection of furniture, computers and equipment? An alternate approach would be to define a value based upon selling subsets of the whole. For example, the furniture to one purchaser and the computers and phone system to a second purchaser. The definition of value also substantially affects the value conclusion. Market value would typically be defined as the value assuming both the buyer and seller are knowledgeable regarding the property, neither the buyer nor seller is under distress to buy or sell and an adequate amount of time is allowed to market the property. A liquidation value would also assume that both buyer and seller are knowledgeable regarding the assets. However, it would assume a very brief period of time to sell the property. Value in use describes the value of the assets to the current owner. It is not indicative of what a third party would likely pay to purchase the assets. In addition to performing an appraisal to estimate the market value of business personal property, other techniques sometimes considered for valuing business personal property are IRS depreciation schedules and appraisal district depreciation schedules. These may or may not result in a value conclusion that is similar to market value. However, it is the writer’s experience that they typically produce a value in excess of true market value. To obtain a quote or further information for a business personal property valuation, contact us at 713-686-9955 The appraisal division of O’Connor & Associates is a national provider of commercial property real estate appraisal services including cost segregation studies, highest and best use analysis, due diligence, gift tax valuation, commercial real estate appraisal, lease abstraction, insurance valuations, business personal property valuations, business purchase price allocations, single-family litigation support and business valuations.Patrick C. O'Connor has been president of O'Connor & Associates since 1983 and is a recipient of the prestigious MAI designation from the Appraisal Institute. He is also a registered senior property tax consultant in the state of Texas and has written numerous articles in state and national publications on reducing property taxes. He continues to set the standard in direction and quality of our appraisal products, adding services ranging from business valuations and business appraisals to cost segregation analysis for income tax reduction. Patrick C. O'Connor <a href = "http://www.poconnor.com">www.poconnor.com</a>
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Rent To Own Property
If you are worried that you income would never be enough for your next home, if you think you might not have access to mortgage finance, you can try a rent to own property Rent to own is a real estate term, used to describe a contract between a seller and a renter, this contract stipulates that a renter is to pay certain amount of money as rent in lieu of a final or out-right purchase of a chosen property Meaning the renter can stay in the property for a specific time paying rent but having the option to buy the property at a future time The rent therefore will not be the market value of rents in that community It will be much higher by a percentage For instance 20% higher than the market value, which will make the renter to pay 120% instead of the 100% others are paying in that vicinity The extra 20% will be targeted towards installment payment . .With this agreement you can have the joy of saving towards the purchase of your new home While you and your family can actually enjoy the ambiance of the new vicinity you wouldn’t have been able to enjoy .The buyer can in the long run enjoy the capital appreciation of his new home, since he would be buying at cheaper rate years back Another advantage is that the renter rental repayment may be fixed for the whole tenor of lease, thereby he would not be affected by the changes in rent . .Another merit of RTO is that you have ample time to make up your mind if you would buy the house or not Its also affords you the opportunity to know the extent of the repairs and maintenance expenses you would incur on the property before purchasing it It builds the credit worth of the buyer as he monthly deposit his rent to the seller It builds the income of the seller . .Problems with RTO: . .If in the long run you decide not to buy the home, you may forfeit the total sum you paid as well as the installment payments This is a big disadvantage A disadvantage to the seller is that the buyer can change his mind So if you want to have a glimpse of pleasure a while as you build up your finances to buy a new home think about getting a rent to own property .
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Real Estate Grants Free Money You Never Have to Pay Back
What is a real estate grant? It’s cash that individuals can obtain to purchase a new home, repair or update their existing home, or to help them pay down a mortgage This is funding that is available regardless of income or credit . .Real estate grants are available through local and state government agencies as well as private foundation groups They provide you with the cash you need, which in one way or another they benefit from as much as you do Here’s how . .Let’s say you obtain a real estate grant to help you buy a new home First time home buyers, for example, can receive as much as $20,000 in cash to be used for a down payment or closing costs By obtaining these funds, it gives the individual the opportunity to buy a home when she may not otherwise be able to . .As a result of helping thousands of people in your community, the government helps move the needle in the real estate market by assisting with home sales That means property values will rise, hundreds of construction workers keep their jobs as investors and home builders continue to have opportunity In the end, the government imposes real estate taxes and makes the money back in the long run . .Similarly, with a home improvement grant, you can get the cash you need to upgrade, restore or expand your home That increases home values for the entire neighborhood, which increases taxes and attracts a higher class of buyers While real estate grants may be $20,000 in free money for you, it’s just a drop in the bucket for the government who wins in the end .
Source: www.rsstnx.com
