Rental Value Capitalization
Do you own a store, office, or other commercial space? If so, we’ll use the rental value capitalization method. This process involves 3 steps:
- First, we determine the rental value of your commercial property. To do this, we look at similar properties for which a lease agreement was signed around the valuation date. When determining the rental value, we take into account differences in factors such as floor area, construction quality, and location.
- Next, we look at the sales price of similar commercial properties on or around the valuation date.
- The capitalization factor is the sales price divided by the rental value.