• Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Ferstl Valuation Services

  • Home
  • About
    • Our Company
    • Our Owner
  • Services
    • Commercial Appraisals
    • Residential Appraisals
    • Expert Testimony
    • Real Estate Consulting
  • Locations
    • Arkansas
  • Blog
  • Contact Us

November 9, 2017

Outlining the Factors that Determine Fair Market Value

Commercial appraisal, real estate appraisal, arkansas real estate consulting

Knowing the fair market value on a potential commercial real estate property can help you avoid paying more than what the property is worth in your investment.

There are many reasons to schedule a commercial appraisal any time you’re looking to purchase a commercial real estate property. Perhaps one of the most important reasons to have an appraisal done, however, is to establish the current fair market value of the property itself. This will help you ensure that you’re not paying more than the property is worth, which will also make it easier for you to obtain financing. When you hire an Arkansas real estate consulting firm to conduct a commercial appraisal, there are a few important factors that are taken into consideration when determining fair market value.

Building Size and Condition

Much like with a residential home appraisal, the size and condition of the property must be taken into consideration. This includes not just square footage, but the condition of important building components, such as the roof and structure. The plumbing, heating, and cooling systems will also be evaluated and factored into the fair market value.

Market Area

In addition to the size and condition of the commercial building itself, the market area of the property is another key factor in determining fair market value. Specifically, market area refers to the quality of the property’s location. For example, properties close to public transportation and other means of traffic will generally have a higher market value than properties located far away from potential customers or clients.

Potential for Rental Income

Another vital consideration in fair market value is the potential the property has to generate rental income. Because of this, properties with lots of different spaces for rental potential will be valued higher than those without usable rental spaces. This is because the more tenants a property is capable of holding at once, the more you’ll likely be able to generate in monthly rental income.

Availability of Similar Properties

Finally, when determining a commercial property’s fair market value, an appraiser will also take into consideration what other commercial properties are available in the area with similar potential for rental income, market area, and size/condition findings. If there are a lot of similar properties available, this will have a negative impact on the property’s fair market value. On the other hand, if there is very limited inventory in the area, this will cause fair market value to increase due to the basic concept of supply and demand.

These are four of the most important factors that an Arkansas real estate consulting professional will take into account when looking at a commercial real estate property. If you’re in need of a real estate appraisal and are looking for a team of professionals you can trust, reach out to Ferstl Valuation Services by calling (501) 313-0641 to request an appointment.

Written by Ferstl Staff · Categorized: Commercial Property Appraisals · Tagged: commercial property appraisal

Primary Sidebar

Recent Posts

  • A Complete Guide to Determine the True Value of Your Property
  • Are Homes Appraising Higher Now?
  • What Qualifications Does a Real Estate Expert Witness Have?
  • BUSTED Part 2: Myths About The Commercial Property Appraisal Process
  • BUSTED Part 1: The Most Common Myths About a Home Appraisal

Categories

  • Commercial Property Appraisals
  • Company News
  • Expert Testimony & Consulting
  • Residential Property Appraisals
  • Uncategorized

Footer

Ferstl Valuation Services
  • Facebook
  • Google+
  • LinkedIn

Ferstl Valuation Services Headquarters

5905 Forest Place, Suite 100
Little Rock, AR 72207
501-313-0641
501-375-8317
[email protected]

About Ferstl Valuation Services

Ferstl Valuation Services is an appraisal company with offices located in Arkansas founded by Tom and J.T. Ferstl. The father-son began their business with a simple goal – to offer their clients reliable, trustworthy, certified real estate appraisals.

© 2022 Ferstl Valuation Services · All Rights Reserved