In the profit, when calculating the net income of land, the market comparison method or cost approximation method is used to get the land price and multiply it by the reduction interest rate of land.
In principle, the method of building residual valuation is a method of income reduction. It is especially suitable for the situation that it is difficult to accurately judge the price of land or buildings by other methods.
For example, when the use and intensity of buildings are inconsistent with the best use of land, it is necessary to judge the degree of depreciation of land market value caused by the existence of buildings (or called functional depreciation of buildings), and it is difficult to make accurate judgments by other methods. At this time, the residual value evaluation method of buildings can be explained.
Extended data:
Applicable object
1, which is suitable for the situation that it is difficult to accurately judge the price of land or buildings by other methods.
For example, when the use purpose and intensity of buildings are inconsistent with the optimal use of land, it is necessary to judge the degree of impairment of land market value by the existence of buildings (or called functional depreciation of buildings), and it is difficult to make accurate judgments by other methods. At this time, a more reasonable explanation can be given by using the residual value evaluation method of buildings.
2. The appraisal object is required to obtain normal income, that is, only the real estate with objective income can use the building residual value appraisal method.
3. The application of building residual value valuation method also requires that the use, strength and use state of buildings should not deviate seriously from the best use state of land, or even conflict.
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