Sven Schwarzat: How to determine the price of your property

Determining the price of a property is a crucial step for both buyers and sellers. This process requires a comprehensive analysis and consideration of various factors in order to determine a realistic and market-driven price. Sven Schwarzat from Schwarzat Capital GmbH, a real estate portfolio manager from Lützen that is active in Leipzig and Magdeburg, provides an overview of the most important methods and aspects for determining the price of a property.

Comparative value method

Market analysis is an essential step in determining the price. This involves examining the current real estate market in the region in question. Important data sources include real estate portals, market reports and local estate agents. The comparative value method is a common method in which similar properties in the same location are used to compare their sales prices. Factors such as size, year of construction, condition and fixtures and fittings play a key role. It is also important to know what the market standard is here. In Leipzig, for example, there are many old buildings that were mainly renovated in the 1990s. If a property was renovated in the 2000s, this increases its value. In another city, things may look different again.

Location is one of the most important factors in property valuation. A property in a sought-after residential area with good infrastructure, schools, shopping facilities and leisure activities is valued significantly higher than a property in a less attractive location. Transport links and future developments such as planned construction projects or infrastructure measures can also have a significant impact on the price. A thorough investigation of the location is therefore essential. Local knowledge is also an advantage here. The Leutzsch district in Leipzig, for example, is characterized in part by villa development and is one of the most beautiful districts in Leipzig. Other streets in this location tend to be weaker and therefore the properties there are also less expensive.

The structural condition and furnishings of the property are also decisive factors in determining the price. A renovated property with modern facilities and high-quality materials is valued higher than a property in need of renovation. Important aspects here include the quality of the building fabric, energy efficiency (e.g. insulation, heating system) and special features such as balconies, terraces, gardens or garages.

Income capitalization approach

The income capitalization approach can be used for rented properties or properties that are intended to be rented out. Here, the value of the property is determined on the basis of the rental income generated or achievable. The annual net rental income is multiplied by a multiplier resulting from the expected remaining useful life and a standard market interest rate. This method is particularly relevant for apartment buildings and commercial properties. The interest rate environment plays an important role here. While Sven Schwarzat still saw multipliers of 30 a few years ago, hardly anything above a factor of 22 is sold now.

Material value method

The asset value method is often used for single-family homes or special properties such as commercial properties. The value of the property is calculated based on the production costs less a reduction in value due to age and wear and tear. The land value is determined separately and added to the building value. This method requires precise knowledge of the construction costs and the regional standard land values. This method is therefore more relevant for a precise appraisal approach

Conclusion

Determining the price of a property is a complex process that takes a variety of factors into account. From location and condition to market trends and economic conditions - all of these aspects are included in the valuation. A reputable buyer or estate agent will always use a mixture of different methods to determine the price. The use of a professional surveyor or real estate expert can also contribute to accurate pricing. Valuers have access to detailed market data and have the necessary expertise to take all relevant factors into account. A professional appraisal can not only determine the exact value of the property, but also serves as an important document for price negotiations or financing applications.

Ultimately, the principle of supply and demand plays a central role in pricing. In a market with high demand and limited supply, property prices will rise, while in a buyer's market with many available properties and low demand, prices may fall. It is important to keep an eye on the current market situation and take this into account when determining prices.

About the author: Sven Schwarzat is Managing Director of Schwarzat Capital GmbH, based in Lützen, which implements numerous construction and real estate projects in and around Leipzig and has been successfully active on the market as a portfolio holder for several years. His expertise and experience make him a reliable advisor for investments in Leipzig and Magdeburg.

Schwarzat Capital GmbH
Ernst-Thälmann-Straße 18
06686 Lützen
Germany

http://www.schwarzat-capital.de

Sven Schwarzat is Managing Director of Schwarzat Capital GmbH, based in Lützen, which implements numerous construction and real estate projects in and around Leipzig and has been successfully active on the market as a portfolio holder for several years. His expertise and experience make him a reliable advisor for investments in Leipzig and Magdeburg.