Land Valuation parison by mikeholy

VIEWS: 12 PAGES: 12

									                Valuation - agriculture

Valuation of agricultural units
- a brief introduction
• Site and dwellings

• Arable land and pasture

• Farm buildings

• Forest

• Forest waste land

• Size influence

• Gravel-pits

Arne Sundquist/Orsalheden
                                          SWEDESURVEY
                 Valuation - agriculture


Valuation of an agricultural unit
       • Valuation situation?
       • Which type of value is relevant?
       • Type of agricultural unit?
       • Relevant information about the object?

       • Valuation method?
           •cost/income method (yield method)
           •sales comparison method
               •direct comparison
               •à la carte-method
       •Final estimation of the value
           • date/time for value
           • value
       •Documentation- valuation report

 Arne Sundquist/Orsalheden
                                                  SWEDESURVEY
               Valuation - agriculture

           Type of agricultural unit:
           • Forest-dominated units
           • Agro-dominated units
              • Vegetable production
                            •   grain
                            •   potatoes
                            •   oil plants, sugarroots
                            •   others
                     • Animal production
                            •   milk
                            •   beef, pork
                            •   chicken/turkey/ostrich/egg-production
                            •   sheep- and goat-farming
                            •   others
                     • Small-farms (horse/recreation
                       farms)
                     • Combined farms/family farms
Arne Sundquist/Orsalheden
                                                                 SWEDESURVEY
     Valuation Theory (4)

• Market value
   – The most probable price of a property
     on the open market
   – Used in most cases
• Net income value
   – The present value of future yearly net
     income
   – Used e.g. for
     - investment decisions
     - market simulation
• Cost value
   – Replacement costs minus depreciation
   – Used e.g. for
     - insurance compensation
     - market simulation
Arne Sundquist/Orsalheden
                                         SWEDESURVEY
              Valuation Methods


• Sales comparison approach
• Income capitalisation approach
• Cost approach



                  When searching for a market value,
                   the income and cost methods are
                      market simulating methods!




Arne Sundquist/Orsalheden
                                                       SWEDESURVEY
                Valuation - agriculture

Methods normally used:

• Sales comparison method

       • Direct comparing method

       • ”A la carte” method

• Cost/income method

       • Valuation based on marginal
         calculation principles



Arne Sundquist/Orsalheden
                                          SWEDESURVEY
                 Valuation - agriculture


The Sales comparison method means
that one have to analyse representative
purchases of similar real properties sold on
an open and free market to find the market
value of the valuation object in question.

For the subsequent analysis the different
observed prices must be standardized to a
comparable measure (e g SEK/hectare,
Price coefficient = Price/Assessed value =
P/T, SEK/m3sk etc).

In Sweden preferably price coefficients are
used
 Arne Sundquist/Orsalheden
                                           SWEDESURVEY
                Valuation - agriculture

  Á la carte - method:
  • Value of site and dwellings is esti-
     mated by comparison with purchase
     of countryside sites and dwellings
     for permanent living apart from
     farming
  • Value of forest is estimated by com-
     parison with purchase of pure forest
     units
  • Value of arable land is estimated by
     comparison with purchase of pure
     arable land units
  • Farm buildings is valued with a
    construction cost method often with
    a fargoing depreciation factor
Arne Sundquist/Orsalheden
                                          SWEDESURVEY
                Valuation - agriculture


Valuation factors for arable land:

 Productivity, soil quality

 Size, hectares

 Running conditions
         •average field area
         •field form
         •obstacles
 Drainage
         •planned drainage
         •self draining soils


Arne Sundquist/Orsalheden
                                          SWEDESURVEY
                Valuation - agriculture


Valuation factors for pasture:

• Productivity, soil quality

• Size, hectares

• Running conditions
         •average field area
         •field form
         •obstacles




Arne Sundquist/Orsalheden
                                          SWEDESURVEY
                 Valuation - agriculture

Valuation factors for forest:
• Productivity, m3/hectare and year
• Standing volume, m3 solid volume/hectare

• Type of trees
     •percentage needletrees
               •pine-wood
               •spruce-wood
     •percentage broadleaves
               •birch-wood
               •oak and beech-wood
               •other

• Running costs, SEK/ m3
     • cutting
     • transport
     • silviculture
 Arne Sundquist/Orsalheden
                                           SWEDESURVEY
                Valuation - agriculture

Valuation factors for farm buildings:
Type of farm building
       •stables
       •hay-barn
       •machine-hall
       •farm warehouse
       •grain store
       •ensilage silo
       •greenhouse
• Size
       •squaremeter building area (mostly)
       •cubicmeter storage volume (silos, grain stores)
• Age
• Standard
       •1 good design for modern farming
       •2 sufficient design for modern farming
       •3 unsufficient design for modern farming
Arne Sundquist/Orsalheden
                                                          SWEDESURVEY

								
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