Not all property valuations are the same. The process for valuing a home differs significantly from valuing a commercial property. Whether you’re a homeowner, investor, or developer, understanding these differences is key to making informed property decisions.
What is a Residential Property Valuation?
A residential property valuation determines the market value of a house, apartment, townhouse, or villa. These valuations are typically used for:
- Buying or selling property
- Mortgage approvals
- Taxation (e.g., capital gains tax)
- Estate settlements
How Residential Property Valuations Are Conducted
- Comparable Sales Method: The valuer compares the property to similar homes recently sold in the area
- Property Features Assessment: Includes size, number of rooms, renovations, and condition
- Local Market Trends: Analyses demand in Perth’s residential property market
What is a Commercial Property Valuation?
A commercial property valuation assesses the market value of business properties such as offices, retail stores, warehouses, and industrial buildings. These valuations are crucial for:
- Investment decisions
- Leasing negotiations
- Development projects
- Business financing
How Commercial Property Valuations Are Conducted
- Income Capitalisation Method: Evaluates rental income and future earnings potential
- Cost Approach: Determines how much it would cost to rebuild the property
- Market & Economic Analysis: Considers economic trends, vacancy rates, and tenant demand
Key Differences Between Residential & Commercial Valuations
| Factor | Residential Valuation | Commercial Valuation |
| Method Used | Comparable Sales Approach | Income Capitalisation Approach |
| Key Considerations | Location, size, condition | Lease agreements, rental yield |
| Valuation Cost | $300 – $800 | $800 – $3,000+ |
| Purpose | Home sales, mortgages, tax | Business investment, leasing, financing |
| Market Volatility | More stable | Subject to economic fluctuations |
Which Valuation Do You Need?
If you are buying, selling, or refinancing a home, get a residential valuation.
If you are investing in commercial real estate, you need a commercial valuation.
For expert property valuations in Perth, trust Tivok Land & Homes.