Improving methods for analyzing the most efficient use of real estate for the purposes of valuation. Ways to improve real estate valuation Suggestions for improving real estate valuation
RUSSIAN ACADEMY OF CIVIL SERVICE
UNDER THE PRESIDENT OF THE RUSSIAN FEDERATION
Federal State educational institution higher professional education
"NORTH-WESTERN ACADEMY OF PUBLIC SERVICE"
in Kaluga
finance and credit
GRADUATE WORK
Kaluga
Introduction
Chapter 1. Theoretical foundations for assessing the market value of real estate
1.1 Real estate valuation: basic concepts and principles of valuation
1.2 Approaches and methods for assessing the value of real estate
1.3 Property valuation issues
Chapter 2. Determination of the market value of the property
2.1 Description of the subject matter
2.2 Determination of the market value of real estate under the cost approach
2.3 Determination of the market value of real estate in the framework of the market approach
2.4 Determination of the market value of real estate under the income approach
3.1 Determination of the final value of the market value of the object of assessment
Conclusion
Bibliography
Introduction
The transition of our country to a market economy required an in-depth development of a number of new areas of science and practice, in particular, real estate valuation.
The real estate market is a sector of the national market economy, which is a set of real estate objects, economic entities operating in the market, market functioning processes, i.e. processes of production (creation), consumption (use) and exchange of real estate and market management, and mechanisms that ensure the functioning of the market (infrastructure and legal environment market).
Now the real estate market includes residential apartments and rooms, office buildings and premises, buildings for industrial and commercial purposes, cottages, summer cottages and rural houses with land plots. Regional peculiarities of the real estate market should be taken into account.
In the production and economic practice of economic entities, there are many cases when it becomes necessary to assess the market value of the property of enterprises. Not a single operation of buying and selling property, lending against collateral, insurance, resolving property disputes, taxation, etc., can do without valuation.
Determining the market value of real estate is a complex and unique process, since it is almost impossible to find two absolutely identical properties. Even in the case when buildings are built according to the same standard project, but located on different land plots, their cost can vary significantly.
The relevance of the topic of the thesis is due to the fact that today there is an increasing need for a competent and objective assessment of the value of real estate, and the institution of property valuation has not yet been fully formed, there is no information base for valuation, the professional training of appraisers in Russia has not yet reached the world level.
The purpose of the work is to determine the market value of the property and justify ways to increase it.
To achieve this goal, it is necessary to solve the following tasks:
1. Explore the theoretical basis for assessing the market value of real estate;
2. To characterize the object of assessment and its environment;
3. Justify the market value of the appraisal object based on three generally accepted approaches;
The object of research is the procedure for determining the market value of property.
The subject of the study is the justification of the market value of the property and the development of recommendations for its increase.
Structurally, the work consists of an introduction, three chapters, a conclusion and a list of references. The first chapter discusses the theoretical foundations of real estate valuation, the second chapter calculates the market value of a property, the third one harmonizes the results of the valuation and determines ways to increase the market value of real estate.
The theoretical and methodological basis of the study is the dialectical method of cognition, as well as the works of scientists, periodicals and Internet materials on the problem under study. In addition, the following methods were used: economic-statistical, monographic, calculation-constructive, as well as the comparison method.
Chapter 1. Theoretical foundations for assessing the market value of real estate
1.1 Real estate valuation: basic concepts and principles of valuation
Various benefits (objects, things, property) are created, sold and acquired to meet certain needs of the state, legal entities and individuals, as well as to obtain benefits from their possession and use. From the possibility of this or that object of property to satisfy the existing needs and from the benefits that the possession of this object will bring in the future, its value, and therefore, the cost, depends.
All operations and transactions with real estate require knowledge of the value of the property. In market conditions, the value of real estate depends on factors, trends and changes in the economy and society as a whole. The need for real estate appraisal arises in the following cases:
§ transactions of purchase and sale or leasing;
§ corporatization of enterprises and redistribution of property shares;
§ attraction of new shareholders and additional issue of shares;
§ cadastral valuation for the purposes of taxation of real estate objects: buildings and land plots;
§ real estate insurance;
§ lending secured by real estate;
§ making real estate objects as a contribution to the authorized capital of enterprises and organizations;
§ development of investment projects and attraction of investors;
§ liquidation of real estate objects;
§ execution of inheritance rights, court sentence, resolution of property disputes;
§ other operations related to the sale of property rights to real estate objects.
Immovable things (real estate, real estate) include land plots, subsoil plots, isolated water bodies, and everything that is firmly connected with land, that is, objects that cannot be moved without disproportionate damage to their purpose, including forests, perennial plantations, buildings, structures. Immovable things also include aircraft and sea vessels subject to state registration, inland navigation vessels, and space objects. Other property may also be classified as immovable by law.
In real estate valuation, land is considered to have a value, while improvements are considered to be a contribution to value.
Real estate is in free civil circulation and is the object of various transactions, which gives rise to the need to assess its value, i.e. in determining the monetary equivalent of various types of real estate at a particular point in time.
In today's economy, there are many different types of value. They are necessary due to various needs and functions. This includes such types as borrowed value, insurance value, fair market value, book value, rental value, salvage value, investment value and many others. However, in general, value can be divided into two categories: value in exchange and value in use.
Value in exchange is the price that will prevail in a free, open and competitive market based on the equilibrium established by the factors of supply and demand. It is sometimes called objective cost because it is determined by real economic factors.
Value in use is the value of the property for a specific user or group of users, i.e. the value of real estate that is used as part of a going concern (for example, real estate used by a factory).
Of all the types of value, the most widespread is the market value - the main type of value in the conditions of market relations. When determining the market value, we proceed from the fact that the market existed in the past (property has already been sold), exists in the present (property is being created for sale) and will exist in the future, since neither the past nor the present of the market contradict this.
Based on the foregoing, we can conclude that not only the market itself, but also the instruments formed by the market, the most important of which is the cost, have a three-component nature. From this perspective, we can say that the cost:
Valid cost, i.e. the most probable price in a given market;
Truly market-based, since the space of market values, which includes the cost of a particular object, is formed solely under the influence of factors of a free, open and competitive market;
Indeed, it is objective, since it reflects the opinions of all the main subjects of the market of the manufacturer (seller), buyer and investor, thereby exhausting the market interests of the parties.
Value can be drawn from the past by putting ourselves in the place of the buyer, from the present by putting ourselves in the place of the builder, and from the future if we put ourselves in the place of the investor. Three main approaches to property valuation follow from this: market, cost and income approaches.
The main task in determining the value is to predict the quantity, quality and duration of future benefits from owning the object of assessment and converting these benefits into present value. Property is analyzed based on the principles of valuation.
The evaluation principles are divided into four groups:
1) principles based on user perceptions (principles of utility, substitution and expectation);
2) principles arising from the process of real estate operation (principles of contribution, residual productivity, marginal productivity, balance, economic size and economic division);
3) principles determined by the action of the market environment (principles of alternativeness, variability, dependence, supply and demand, competition and compliance);
4) the principle of the best and most efficient use is the main principle of evaluation. This principle combines all other principles and is the foundation of any real estate appraisal.
A prerequisite for real estate valuation is to take into account the specifics of the functioning of the real estate market, since the state of the real estate market has a significant impact on income flows, risk levels and on the possible sale price of a property at a certain point in the future, i.e. on the main data used in the valuation using the income approach.
1.2 Approaches and methods for assessing the value of real estate
In real estate appraisal, there are three generally accepted approaches to determining the value: costly, market and profitable. Each approach has its own established methods, techniques and procedures. The conceptual similarity of approaches to the evaluation of various property objects is revealed. At the same time, the type of the object being valued determines the features of specific methods arising from the specific problems of valuation, which, as a rule, are inherent only to this type of property.
Cost approach
The cost approach to the valuation of real estate is based on comparing the costs of creating a real estate object with the value of the valued or comparable objects. The approach is based on a study of the investor's ability to acquire real estate and proceeds from the principle of substitution, which states that the buyer, exercising due prudence, will not pay for the object a larger amount than the cost of obtaining the relevant building plot and erecting an object similar in purpose and quality for the foreseeable future without significant delays.
The main stages of the assessment procedure in this approach:
1. Calculation of the cost of acquiring or long-term lease of free and available land in order to optimize its use;
2. Assessment of the replacement cost of the building being assessed. The calculation of the replacement cost is based on the calculation of the costs of recreating the object in question, based on current prices and manufacturing conditions for similar objects on a certain date.
3. Determining the amount of physical, functional and external depreciation of the property;
4. Estimation of the value of entrepreneurial profit (investor's profit);
5. Calculation of the final cost of the appraised object by adjusting the replacement cost for depreciation, followed by an increase in the resulting value by the cost land plot.
The cost approach is most appropriate when evaluating properties that have recently been put into operation, it leads to the most convincing results in the case of a reasonably justified cost of the land and little accumulated depreciation of improvements. The cost approach is justified in estimating the value of planned facilities, special purpose facilities and other property, transactions for which are rarely concluded on the market, and can be used in valuation for insurance purposes. This approach, when evaluating objects subject to reconstruction, allows you to determine whether construction costs will be offset by an increase in operating income or proceeds from the sale of property. The use of the cost approach in this case avoids the risk of overinvestment.
Also, the cost approach is used for the purposes of taxing the property of legal entities and individuals, during the arrest of real estate, to analyze the best and most efficient use of a plot of land.
Determining the value of a land plot
In accordance with Art. 35 of the Civil Code of the Russian Federation, upon transfer of ownership of a building, structure, structure located on someone else's land to another person, it acquires the right to use the corresponding part of the land plot occupied by the building, structure, structure and necessary for their use, on the same conditions and the same amount as the previous owner.
Of all land valuation methods, the method of comparative sales analysis is of decisive importance.
The replacement cost of construction of the property under appraisal is calculated at current prices as new (excluding accumulated depreciation) and related to the appraisal date. The basis for determining the replacement cost is the calculation of the costs associated with the construction of the facility and its delivery to the customer. Depending on the procedure for accounting for these costs, it is customary to allocate direct and indirect costs in the cost of construction.
Direct costs are directly related to construction (the cost of materials, the wages of construction workers, the cost of construction machines and mechanisms, etc.). Indirect costs - costs that are not directly related to construction (fees to design and estimate organizations, the cost of investments in land, marketing, insurance and advertising costs, etc.). The developer's profit reflects the costs of managing and arranging the construction, general supervision and the entrepreneurial risk associated with the development. The profit of the entrepreneur is defined as part of the profit from the sale of the object. Regardless of the amount of interest and the corresponding basis (a component of the value of property), the amount of entrepreneurial profit remains constant.
The main source of comparative data on the cost of real estate objects are building contracts for the construction of structures similar to the one being assessed. In addition, design appraisers typically maintain their own databases of current prices for completed homes, office buildings, apartments, hotels, shop buildings, and industrial buildings. Currently in Russia there is a system of standards and price levels determined by the corresponding price indices.
Built objects under the influence of various natural and functional factors lose their operational qualities and are destroyed. In addition, the market value of the object is influenced by external economic impact from the immediate environment and changes in the market environment. At the same time, physical depreciation (loss of performance), functional aging (loss of technological compliance and cost due to scientific and technological progress), external or economic depreciation (change in the attractiveness of an object in terms of changes in the external environment and the economic situation in the region) are distinguished. Together, these types of depreciation constitute accumulated depreciation, which will be the difference between the replacement cost of the object and the cost of reproduction (replacement) of the object of assessment.
The most complete and reliable source of information about the technical condition of a building or structure is the materials of a natural survey. The first condition for conducting such surveys should be an accurate definition of the functional purpose of the object of assessment: use for its intended purpose or with a change in technological and functional parameters. In this case, it is necessary to present the limits of changes in loads and impacts on the supporting structures of buildings.
The second condition for conducting research is to obtain complete information about the natural and climatic parameters and specific factors of the impact of the area where the object is located and their changes in the process of technogenic activity.
Market Approach
A prerequisite for the application of market approach methods is the availability of information about transactions with similar real estate objects (that are comparable in purpose, size and location) that took place in comparable conditions (time of the transaction and conditions for financing the transaction).
The comparative approach is based on three main principles of real estate valuation: supply and demand, substitution and contribution. Based on these principles of real estate valuation, the market approach uses a number of quantitative and qualitative methods to highlight the elements of comparison and measure adjustments to market data of comparable properties to model the value of the property being valued.
The main principle in the market approach to real estate valuation is the substitution principle, which states that a potential buyer will not pay a price for property that exceeds the cost of acquiring a similar, from his point of view, property.
The main difficulties in applying the methods of the market approach are associated with the lack of transparency of the Russian real estate market. In most cases, the real prices of real estate transactions are unknown. In this regard, often when assessing, the prices of proposals for objects put up for sale are used.
The sales comparison method determines the market value of a property based on an analysis of recent sales of comparable properties that are similar in size and use to the property being valued. This method of valuation assumes that the market will set the price for the property being valued in the same way as for comparable, competitive properties. In order to apply the sales comparison method, specialists use a number of valuation principles, including the principle of substitution.
The application of the sales comparison method consists in sequentially performing the following steps:
1. detailed market research in order to obtain reliable information about all factors related to objects of comparable utility;
2. identifying suitable units of comparison and conducting a comparative analysis for each unit;
3. comparison of the object being evaluated with the selected objects of comparison in order to adjust their sales prices or exclude them from the list of those being compared;
4. bringing a number of adjusted indicators of the cost of comparable objects to the market value of the object of assessment.
Real estate offices, government sources, own databases, publications, etc. can be used as sources of information about real estate market transactions.
After choosing the unit of comparison, it is necessary to determine the main indicators or elements of comparison, using which it is possible to model the value of the object through the necessary adjustments to the purchase and sale prices of comparable real estate objects.
In valuation practice, when determining the value of real estate, such main elements of comparison are distinguished as the transferred rights to real estate, the conditions for financial settlements when acquiring real estate, the terms of sale (purity of the transaction), the time of sale, the functional purpose of the object, location, convenience of access roads, area of the object, technical condition and level of finishing of premises.
This method is most effective for regularly sold objects.
Quantitative and qualitative methods are used to highlight the elements of adjustment measurement.
Quantitative methods include:
paired sales analysis (two different sales are compared to determine the adjustment for one comparison item);
Statistical analysis (the method is based on the use of the apparatus of mathematical statistics for correlation and regression analysis);
· Analysis of the secondary market (this method determines the amount of adjustments, based on data that are not directly related to the object of assessment or the object of comparison) and others.
Quality practices include:
classification (comparative) analysis (the method is similar to the analysis of paired sales, except that the adjustments are expressed not in percentages or monetary amounts, but in categories of fuzzy logic);
Distribution analysis (comparative sales are distributed in descending order of adequacy, then the place of the object of assessment in the series of comparative sales is determined).
income approach
Determining the market value of real estate using the income approach is based on the principle of expectation. According to this principle, the typical investor, that is, the buyer of a property, acquires it in anticipation of receiving future income from use. Considering that there is a direct relationship between the size of the investment and the benefits from the commercial use of the investee, the value of real estate is defined as the value of the rights to receive income generated by it, in other words, the value of the property is defined as the present value of future income generated by the subject of appraisal.
The advantage of the income approach compared to the cost and market approaches is that it reflects the investor's view of real estate as a source of income to a greater extent, that is, this quality of real estate is taken into account as the main pricing factor. The main disadvantage of the income approach is that, unlike the other two approaches, it is based on forecast data.
The main stages of the assessment procedure in this approach:
1. Preparing a forecast of future income from the lease of the areas being assessed for rent for the period of ownership and, based on the data obtained, determining the potential gross income (GRP), which is calculated according to formula 1.1:
PVD \u003d S * Ca, (1.1)
S is the area to be leased, sq.m;
Sa - rental rate for 1 sq.m.
2. Determination based on market analysis of losses from underutilization of space and in the collection of rent, calculation of the actual gross income (ARI). As a rule, the owner in the long run does not have the opportunity to permanently lease 100% of the building area. Losses of rent occur due to underemployment of the property and non-payment of rent by unscrupulous tenants. The degree of unemployment of an object of income-producing real estate is characterized by the coefficient of underutilization, determined by the ratio of the value of unleased areas to the value of the total area to be leased.
The calculation of the actual gross income (ARI) is carried out according to the formula 1.2:
DVD \u003d PVD * Kz * Ks, (1.2)
DVD actual gross income;
PVD potential gross income;
Kz area load factor;
Kc coefficient of collection of payments.
It should be noted that other income received from the operation of the facility in excess of rental payments (for example, for the use of additional services - car parking, etc.) must be added to the DIA calculated by the above method.
3. Calculation of the costs of operating the property being valued, which is based on an analysis of the actual costs of its maintenance and / or typical costs in this market. Expenses can be conditionally fixed (property tax, insurance premiums, payments for a land plot), conditionally variable (utilities, current repairs, salaries of maintenance personnel, etc.), replacement costs (expenses for the periodic replacement of fast-wearing structural building elements).
Thus, the estimated value of operating costs is subtracted from the DIA, and the final figure is net operating income (NOR).
4. Recalculation of net operating income into the current value of the object.
Direct capitalization method - a method for determining the market value of an income-generating object, based on the direct conversion of the most typical income of the first year into value by dividing it by the capitalization ratio obtained on the basis of an analysis of market data on the ratio of net income and the value of assets similar to the object being valued, obtained by the market method extraction. Such a Western classic version of the direct capitalization method, in which the capitalization ratio is extracted from market transactions, is practically impossible to apply in Russian conditions due to the difficulties in collecting information (most often, the conditions and prices of transactions are confidential information). Based on this, in practice it is necessary to use algebraic methods for constructing the capitalization coefficient, which provide for a separate assessment of the rate of return on capital and the rate of its return.
It should be noted that the direct capitalization method is applicable to the valuation of operating assets that do not require, at the date of the valuation, large investments in the duration of repairs or reconstruction.
1.3 Property valuation issues
Difficulties are associated with a number of problems that arise in property valuation (approaches and methods), incorrectness or inconsistency of laws and regulations in this area. Let's consider these questions in a little more detail.
The first problem is by account, and not by purpose - the choice of capitalization and discount rates.
1. The cost of a loan (cost of capital) - for enterprises that do not have independent behavior (there is no securities market).
2. The average marginal value of own finances - for enterprises whose shares are quoted on the market.
3. Based on the average operating profitability of the enterprise or its own industry.
4. Average marginal marginal costs of the projects under study (when investing).
5. Rates of reimbursement for loans.
6. Planned norms.
7. Rate of interest on loans (a political economy concept related to national income (ND) and domestic national product (GNP)).
8. Profitability of an alternative investment (for example, a deposit account in a bank).
9. Minimum risk-free return, from an investor's point of view.
The real short-term interest rate, defined as the difference between the yield on Treasury bills and the consumer price index.
A lot of practical methods for choosing a rate with the same theoretical base speaks of the unfavorable methods and criteria for choosing it. The definition of the room rate is outside of financial management theory - in the field of psychology (the realm of art, not science).
In order to make an assessment by different specialists, the value of the compound interest rate should be adopted by law and reflected in the methodology, as it was in its time, according to the standard coefficient of efficiency of capital investments (investments - as they say now). Initially, the efficiency rate was different for each industry, then one rate was adopted for all industries. It should be emphasized that the standard efficiency ratio played the same role (carried the same burden) as the capitalization rate (efficiency rate, comparison rate, investment placement rate).
The second problem is related to point valuation of the property value. The situation is such that ten experts working independently of each other will give ten different estimates of the value of the same property (property). This is due to the calculation procedure and the choice of standard coefficients. The situation is reminiscent of the manufacture of a part. On the same machine, different parts will be manufactured by the same worker according to the same drawing. There are many reasons for this, most of which, in principle, cannot be ruled out. Therefore, a system of tolerances for the dimensions of parts has been adopted in production. If the dimensions of the manufactured part are within tolerance, then it is considered fit. The deviations and scatter of the initial data used for the calculation in all approaches and methods, as a percentage of the average, are more significant than the tolerances for the dimensions of the parts.
The way out of this situation (the solution to this problem) is to replace the point valuation of the property value with the interval one, on the one hand, and the numerical calculation should be carried out by probabilistic methods. The concept of evaluation in mathematics implies an approximate calculation, most often at the level of an order of magnitude. For example, when calculating on a slide rule, it was required to determine the number of digits in the integer part of the number.
Another problem is related to the choice of weighting factors when reconciling property value calculations made using the three approaches. Each author (expert, appraiser) accepts weight coefficients (factors of significance of the calculation method) at his own discretion, and the difference between the estimates can be significant. One way out of this situation is to adopt a weighting factor that is evenly distributed in a certain range for each assessment method (approach).
The next problem arises in the comparative (market) assessment of the value of property, when it is necessary to introduce correction factors to bring the object being valued and market analogues to a comparable type. Here, too, there is considerable arbitrariness. This is especially true of the correction factors when comparing the locations of the territorial location of the property being valued, and a number of others.
One of the most difficult problems is the reliability of information. This applies to both market information about the asking and sold price of the assessed value of the property, and information on standards when calculating the value using the standard method in the cost approach. Previously, design and technological institutes of all branches of the national economy had this information. This information is either lost or outdated.
To remove most of the problems that arise in the process of estimating the value of property, all calculations should be performed on the basis of probability intervals. As a result of the calculation, the value of the property will be presented as a truncated distribution. The median cost estimate should be recommended as the offer price of cost. In this case, the chances for the seller and the buyer are the same: the probability for the buyer to buy cheaper than the offered price is equal to the probability for the seller to sell for more than the offered price.
In this case, both the seller and the buyer have full information about the possible prices of the sale and purchase and their probability. Depending on the urgency of the proposed transaction, counterparties can make informed decisions: for the buyer to wait and look for another acquisition object, if time is needed; for the seller - a reduction in the asking price if there is an urgency in the implementation of the transaction.
There are many such options on the market. For the seller and the buyer, the urgency in buying and selling can be different.
In 2001, Decree of the Government of the Russian Federation No. 519 of July 6 was adopted, in which the Ministry of Property Relations of the Russian Federation is charged with the duty of "development and approval of methodological recommendations for valuation activities." This should be done in relation to the various objects of assessment, types of value of the object of assessment, the conduct of the assessment, as well as the examination of assessment reports. The work is carried out in coordination with the federal executive authorities that regulate the relevant field of activity.
However, the ministry is not in a position to develop a methodology for all property objects (for all occasions), and even more so to develop regulatory materials.
Therefore, at the regional level, depending on the existing property market, on the basis of an industry-wide methodology, develop regional methods for groups of homogeneous objects with the creation of the necessary regulatory framework. Then the problem arises of coordinating and approving local methods at the level of the administration of the region, city or region.
The procedure for agreeing and approving regional methodological materials in relation to various objects of property should be regulated by the Ministry of Property Relations of the Russian Federation.
This will help to more reasonably assess all types of value of various types of property, which will remove various misunderstandings, lead to comparability of the calculation results by different appraisers and appraisal firms, and reduce the semi-criminal connotation in the field of appraisal activities.
Chapter 2. Determination of the market value of the property
2.1 Description of the subject matter
Currently, there is a fairly stable demand for new real estate in the form of detached buildings, in the price range of $330-$3250 sq.m. In general, the offer ranges from $400 sq.m. to $4500 sq.m. At the same time, there is a tendency to some increase in the upper limit of the offer price.
This is explained by the fact that until recently insolvent demand becomes financially justified.
On the other hand, particularly prestigious office space and retail space have by now "found" their relatively permanent owners. Accordingly, the prices for premises, although less prestigious, but still expected to be sold, are rising. In addition, fluctuations in the prices of proposals are not always justified from the point of view of economic logic.
The property is owned by LLC "Aris" and is located in the Leninsky district of the city of Kaluga.
The object includes a three-storey brick office building with a restaurant with a total area of 1.375.8 sq.m.
The object is located on one of the longest highways of the city, relatively close to the business and administrative center of Kaluga. Transport accessibility is good.
Description of the land
Plot shape rectangular;
Land area 556.0 m2
Soil condition sandy soils form the basis of the building foundations.
Topography of the area: the relief of the site is calm.
Infrastructure provision:
The following communications are connected to the residential building for:
· water supply;
sewerage;
· power supply;
heat supply;
telephonization
Possible restrictions on use and easements
Permitted use. The practice of working in the real estate market shows that a change in the functional purpose of real estate is possible only upon agreement with the local administration, which is also confirmed by the owner of the appraisal object.
easements. The site is assumed to be subject to typical easements, such as right of way and communications, but it is assumed that none of the existing easements should be an obstacle to the best and most efficient use of the site. The site does not include monuments, unique natural objects, power transmission towers, alignment marks, etc., so there are no special restrictions for the construction of office and residential premises.
Building Description
The building has 3 floors, made in compliance with modern construction standards.
Table 1
Structural elements of the building
| Structural element | Characteristic | Technical condition |
| Foundations | Concrete belt | Excellent |
|
and their exterior |
silicate brick red finishing brick, t=0.5 |
Excellent |
| Partitions | brick | Excellent |
|
Covers: Attic; Interfloor; Above basement |
W/concrete W/concrete W/concrete |
Excellent |
| Roof | Combined | Excellent |
| floors | Parquet, tiles, linoleum | Excellent |
|
Wooden |
Wooden modernized | Excellent |
| Interior decoration | Euroclass | Excellent |
|
Sanitary and electrical devices: heating · water pipes sewerage electric lighting · telephone · ventilation |
Central, from the boiler room Drain to city sewer Hidden wiring Natural |
Excellent |
| Other works | blind areas | Excellent |
2.2 Determination of the market value of real estate under the cost approach
In this case, an administrative brick three-story building was chosen as an analogue object in accordance with Sat. UPVS No. 33, tab. 4 (Enlarged indicators of the replacement cost of construction of residential, public, communal buildings and buildings for consumer services. M: 1972) Table 52 as the most appropriate in terms of design features to the object of assessment.
table 2
Comparative analysis of the object of assessment and the object-analogue
(Determination of the coefficient of similarity)
| Structural elements | Analog object | Object of assessment | Similarity degree (similarity coefficient) | Specific weight, elements % | |||
| analogue object | object of assessment | ||||||
| 1 | 2 | 3 | 4 | 5 | 6 | ||
| 1. Foundations | reinforced concrete blocks | reinforced concrete blocks | 1,00 | 5,0 | 5,0 | ||
| 2. Walls and partitions | brick | brick | 1,00 | 24,0 | 24,0 | ||
| 3. Overlays | w/concrete | w/concrete | 1,00 | 9,0 | 9,0 | ||
| 4. Floors | concrete | concrete | 1,00 | 10,0 | 10,0 | ||
| 5. Openings | simple wooden | simple wooden | 1,00 | 11,0 | 11,0 | ||
| 6. Interior decoration | simple | - | 0,00 | 8,0 | 0,0 | ||
| 7. Sanitary and electrical devices |
central heating · water pipes sewerage · ventilation electric / lighting |
central heating · water pipes sewerage · ventilation electric / lighting |
1,00 | 12,7 | 12,7 | ||
| 8. Roof | roll on reinforced concrete slabs | ─ | 0,00 | 6,0 | 0,0 | ||
| 9. Stairs and entrances | – | – | 1,00 | 5,0 | 5,0 | ||
| 10. Simple work | – | – | 1,00 | 9,3 | 9,3 | ||
| TOTAL: | 0,8 | 100 | 86 | ||||
| Correction factor | 0,86 | ||||||
Determination of the total replacement cost of the appraised object.
Basic input data:
Capital group - I.;
· Building volume: Vstr. = 4444 m3;
· Total area: S=1.375.8 m2;
Sources of regulatory data: Sat UPVS No. 4, table 52
Basic calculation formula:
PVA \u003d US1969 x Vstr. x I69-84 x I84-20.12.2007 x Kn, (3.1)
where PVS is the total replacement cost of the object, rub.
US1969 cost of building a unit of construction volume in 1969 prices; US1969=24.9 r/m3
Vpage construction volume, cub. m;
I69-84 index of cost conversion from 1969 prices to 1984 prices; for residential and commercial buildings on average - 2.21;
I84-20.12.2007 - index of conversion of the cost from prices in 1984 to prices on the date of assessment (20.12.2007) according to Inf. Sat. on pricing and settlements for work performed in construction, Kaluga: December 2007;
K84-20.12.2007 = 61.07
Кn is a correction factor for the difference of the object-analogue of the assessment. Kn=0.86
Calculation of the total replacement cost of the object:
PVA \u003d 24.9 x 4,444 x 2.21 x 61.07 x 0.86 \u003d 12.843.755.88 rubles.
Assessment of depreciation (depreciation) of an object
Based on the estimated effective life of the object (capitality group I), physical depreciation (depreciation) as of the valuation date will be 5%, i.e. RUB 642.187.80
Since the building is new, there is no functional (moral) deterioration.
Economic (external) depreciation has not been established: buildings of this type and condition are currently in demand on the market, and there is no reason to assume that this situation will change significantly in the near future.
Determining the entrepreneur's profit
The entrepreneur's profit is the market-determined rate of return that the entrepreneur expects to receive in the form of a premium for the use of his capital invested in construction.
The profit of an entrepreneur (Ppr) can be determined from the ratio of entrepreneurial income Dpr and the cost of construction (C / b str.) Taking into account the construction period (Tstr.) According to the formula:
According to the Kaluga construction organizations, the cost of construction of 1 square. m of individual office buildings of conventional construction is an average of 10,500 rubles. including finishing. Normal interior decoration increases the cost of construction by 9-12%. Luxury finishing increases the cost of individual works by 1.38 times (Marshall & Swift Handbook). The construction period currently usually does not exceed 2 years. The cost of investing in Kaluga in retail space located within the central part of the city lies in the range of $$ 1200÷3500 sq. m. m. Let's take for our calculations the value - 1200 US dollars, or 30936 rubles. Under these conditions, the profit of the entrepreneur:
= 0.937, or 97.3%.
Table 3
Calculation of the final value of the object of assessment
Thus, the market value of the property, obtained using the cost approach, is 25,982,918.15 rubles, or rounded 25,982,918 rubles. (Twenty-five million nine hundred eighty-two thousand nine hundred eighteen rubles) without VAT.
2.3 Determination of the market value of real estate in the framework of the market approach
Table 4
Characteristics of objects of comparison
| Characteristics of comparison objects | Object of assessment | Object No. 1 | Object No. 2 | Object No. 3 | Object No. 4 | ||||
| 1 | 2 | 3 | 4 | 5 | 6 | ||||
| Address of the object | Kaluga, st. Suvorova, d.29 |
Kaluga, st.Tele-visionnaya, 2a |
Kaluga, st. Moscow, d.237 |
Kaluga, st. Azarovskaya, 26 |
Kaluga, crystal, |
||||
| Year of construction | 2002 | 1995, reconstruction 1998 | 2003 | 1971, reconstruction 2002 | 1988 | ||||
| Total area (sq. m.) | 1375,8 | 1157,1 | 297,3 | 2234,0 | 3806,0 | ||||
| Main purpose in current state | Office space, cafes, recreation areas | Office rooms | Office space, recreation areas | Office and exhibition premises | Office rooms | ||||
| Initial appointment | Same | Administrative building | Administrative building | book base | Administrative-industrial building | ||||
| External enclosing structures | brick | brick | brick | brick-panel with foam block inserts | reinforced concrete panels | ||||
| Location | above average | average | average | below the average | below the average | ||||
| Land plot |
122971 m2 (other buildings available) |
under the building | under the building + ramp area | ||||||
| Finish quality | class "E" | class "U" | luxury class | luxury class | class "E" | ||||
| Quality of parking and vehicles | Along the street, spec. organized, 20 m long; playground in the yard | Parking along the street (20 m); indoor parking | Organized parking (special site) | Along the street, spec. organized 20 m long; indoor parking | Limited indoor parking | ||||
| Sale period | –– | December 2007 | August 2007 | February 2007 | October 2006 | ||||
| number of storeys | 3 floors | 2 floors | 3 floors | 2 floors | 3 floors | ||||
| Price 1 sq. m. of total area, rub. rub. | – | 33000 | 41500 | 28500 | 15500 | ||||
Definition (justification) of adjustments
1. Adjustment for market conditions (date of sale)
In this case, the most correct method is to use the pair sales method. It involves the selection of objects that differ only in the time of sale and determine the amount of adjustments. We did not find such objects, therefore the amount of adjustments was determined on the basis of data on monthly inflation rates for the periods of interest to us according to the formula:
where Mi is the average monthly inflation rate, Kinfl. = 1.0072
Calculation formula: Kinfl = Ksr.m.infl = const Ksr.m.infl = 1.0072
100 × Ktcrminfl 100
Table 5
2. Location.
The location of the objects being compared was evaluated based on an expert assessment on a scale: “excellent”, “excellent”, “good”, “above average”, “average”, “below average”, “satisfactory”, “bad”, “very bad”. Thus, the scale consists of 8 gradations. Each gradation was estimated at 10%.
Table 6
| Object of assessment | Object No. 1 | Object No. 2 | Object No. 3 | Object No. 4 | |
| Location | above average | average | average | below the average | below the average |
| Amount of adjustments, % | - | +10 | +10 | +20 | +20 |
3. Correction for physical difference.
The only significant difference between the objects of comparison and the object of assessment is the material of the enclosing structures in the object of comparison No. 3 - reinforced concrete panels, while in the object of assessment and in other objects of comparison, brick was used for these purposes. This difference is estimated by us at 6%.
4. Correction for the state of the object
The state in which the object of sale and purchase is located has a direct impact on its price. The easiest way to take into account the difference in the “condition” factor is to adjust the sale price for the cost of the repair work that needs to be carried out so that the object of comparison corresponds to the condition of the object of assessment.
In this case, the state of the object was assessed by an expert in the range of the following gradations: "excellent", "good", "above average", "average", "below average", "satisfactory", "poor", very poor" with the price of one gradation – 6%.
Table 7
5. Adjustment for finish quality
When evaluating the quality of finishing, six levels of quality were considered:
Top quality - class "luxury";
Improved quality - class "U";
average quality - class "C";
Satisfactory quality - class "E" (economical)
low-level quality - "N";
very bad - "Oh".
Gradation price 5%
Table 8
6. Correction for the area of the object.
In our case, we have an area range from 297.3 m2 to 3806.0 m2. According to our research, an increase in area by 1 m2 gives a decrease in the price of 1 m2 by:
(Sob.av. Sob.ots) x K, (3.3)
where: Sob.av. area of the comparison object;
Sob.ots area of the object of assessment;
K empirical coefficient, K = 0.00533
Calculation formula:
Table 9
7. Adjustment for the presence of a land plot.
The presence of a land plot is regarded as an advantage, since it is one of the potentials of the facility. Studies show that in most cases, the presence or absence of a land plot near office buildings is estimated by the market within 5% of the value of the object (in addition to the parking lot).
8. Correction for number of storeys.
In our case, objects with the number of floors from 2 to 5 are considered. Studies show that more than 3 floors are not considered an advantage. The current state of the office space market is such that investors and tenants prefer to use buildings with 2÷3 floors as office space. From the point of view of market value (value in exchange), and not investment (in use), the cost of 1 sq.m of buildings with more than 3 storeys is lower than the cost of 1 sq.m. 2÷3 storey buildings. Up to 5 ÷ 6 floors, such a reduction in cost lies within 3 ÷ 5%. For 9, 11-storey buildings, this value is 12÷15%.
9. Adjustment for the availability and quality of parking.
The presence of parking at the property is regarded as an increasing cost factor. In this case, the availability and quality of parking was assessed. The quality of parking was considered in three options:
· outdoor parking- along the street in front of the facade of the building there is a parking space within 50m; such parking was expertly estimated at 5%, (medium quality);
· organized parking - outside the road there is a special asphalted area for car parking - 10%, (good quality);
· indoor parking - parking for cars outside the gates of the enterprise (on the internal territory) - 0%, (poor).
Table 10
Final adjustments
| Comparison elements | COMPARABLE SALES | ||||
| Object of assessment | Object No. 1 | Object No. 2 | Object No. 3 | Object No. 4 | |
| 1 | 2 | 3 | 4 | 5 | 6 |
| Selling price, rub./sq. m | –– | 33000 | 41500 | 28500 | 15500 |
| Transferred rights | Full ownership | Full ownership | Full ownership | Full ownership | Full ownership |
| Adjustment amount | ― | 0% | 0% | 0% | 0% |
| Adjusted Price | ― | 33000 | 41500 | 28500 | 15500 |
| Financing conditions | Market | Market | Market | Market | Market |
| Adjustment amount | ― | 0% | 0% | 0% | 0% |
| Price after adjustment | ― | 33000 | 41500 | 28500 | 15500 |
| Terms of sale | Commercial | Commercial | Commercial | Commercial | Commercial |
| Adjustment for terms of sale | ― | 0% | 0% | 0% | 0% |
| Price after adjustment | ― | 33000 | 41500 | 28500 | 15500 |
| Market conditions (date of sale) | ― | December 2007 | February 2007 | October 2006 | |
| Adjustment for market conditions | ― | 0,0 | +9,0 | +13,0 | +17,1 |
| Price after adjustment | ― | 33000 | 45235 | 32205 | 18151 |
Conclusion: The smallest number of adjustments was made for the object of comparison No. 3, therefore, the price of the object of assessment is taken equal to the adjusted price of the object of comparison No. 3, i.e. 32205 rub./sq.m. The found value lies in the price range from 18,151 rubles/sq.m to 45,235 rubles/sq.m. The value of the appraisal object, obtained by direct comparison of sales, will be: 32205 × 1375.8 = 44.307.639 rubles.
Thus, the value of the appraisal object is 44,307,639 rubles. (Forty-four million three hundred seven thousand six hundred thirty-nine rubles) without VAT.
2.4 Determination of the market value of real estate under the income approach
The work used the method of direct capitalization to assess the value of the property as ready for use. This method gives a fairly accurate estimate of the present value of future income in the case when the expected income stream is stable or has a constant growth (fall) rate.
Income Analysis
All income for the property being valued is projected based on the rent for premises of various functional purposes. We have conducted a market study, the purpose of which is to establish rental rates for residential premises that would be comparable to the object of assessment. This research included interviews with several owners, leasing agents and developers, studying the prices of offers and the terms of the current lease.
In the course of the preparatory work, it was found that, taking into account the location of the object and its profile, the following monthly rental price should be taken for calculation: 1175 rubles/sq.m.
Cost analysis
Operating expenses are the ongoing costs associated with owning and operating a property. They are divided into constant - the value of which does not depend on the degree of occupancy of the building by users (property taxes, insurance premiums, land rent), and variables - depending on the degree of occupancy of the building (payment for electricity, water, etc.).
Property taxes include: land tax, building tax. Since the value of land was not made within the framework of this assessment, the level of its taxation should not be determined.
The property tax is 2% of the book value of the property (Book value = Cost - Depreciation).
For a newly purchased object, the initial cost is equal to the purchase price. For a newly built or under construction building, the cost is equal to construction costs, depreciation is 0. The book value of the building at the valuation date is the sum of the purchase price (or book value at the time of acquisition) of the building and the costs incurred for renovation, excluding VAT. We consider the amount of property tax to be constant, because for a building of capital group 1, the depreciation rate is 1% per year, and a change in the value of property tax can be safely neglected.
Insurance payments amount to 0.3% of the replacement cost of the finished object, excluding VAT.
In this case, the amount of utility bills is assumed to be 7% of the actual gross income (ARI).
The inclusion of facility management costs in operating costs is due to the peculiarity of the property as a source of income. Owning real estate, unlike owning a cash deposit in a bank, requires some effort to manage the property. Whether this is managed by the owner or a third party, including management costs in total costs, we acknowledge that part of the gross rental income is not generated directly by the property, but by the efforts of the manager.
For this type of facility, management costs account for 2.2% of the actual gross income.
Since the building was built in 2002 and major repairs are not required, the cost of current repairs is determined at a rate of 4% of the EIA.
Based on the available reliable data on the cost of replacing short-lived building elements that have similar characteristics to the object of assessment, a value of 3.6% of the EED was taken into account.
Other expenses typically amount to 2% of operating expenses.
Determination of the overall capitalization ratio
The capitalization ratio reflects the dependence of the value of the object on the expected income from its operation. Due to the lack of sufficient data on sales of similar properties, the capitalization rate can only be determined by the summation method, according to which the value of the capitalization rate is equal to the sum of:
SC \u003d NPb / r + R + L ± Sv.k., where
SC - capitalization rate;
NPb/r risk-free rate of return;
P is the risk premium corresponding to the investment in this asset;
L - premium for low liquidity of the object;
St. to. capital return rate.
The risk-free rate on term foreign currency deposits in banks of the highest category is 5-9% (we accept 7%).
Risk premium (P). The probability of loss of property was estimated based on information on the number of cases of loss of property in the city of Kaluga, taking into account the collected data P = 4%.
Additional risk premium – 4%.
The liquidity ratio is determined by the approximate time for the sale of this type of property, which we estimate, taking into account the current economic situation, at 0.4 years.
Kn/liq. = Kbezrisk. × sale time = 0.07 × 0.4 = 0.028 or 2.8%
The investment management risk premium is assumed to be 4.8%.
The second component of the overall capitalization ratio, the rate of return on capital or the increase/decrease in the value of the fund, is calculated as the ratio of one to the number of years required to return the invested capital.
The time it takes for the return of capital, according to the calculations of a typical investor, is 20 years, based on this, the capital recovery rate will be 5% (1/20).
At present, the situation on the market for non-residential premises in Kaluga is such that for relatively new properties with little natural wear and tear (depreciation) there is no reason to expect a decrease in their value in the foreseeable future. In addition, the cost increase is greatly influenced by the favorable location of the facility close to the city center and major highways. In this case, the investment attractiveness of the appraisal object is obvious, so the capital return rate is taken with a (-) sign.
The total capitalization ratio is:
R0 = 0.07 + 0.04 + 0.028 + 0.048 - 0.05 = 0.186
Calculation of the value of the object of appraisal using the method of direct capitalization of rental income
To calculate the potential gross income (GRP), the available monthly rental rates per year are used: 14,100 rubles/sq.m.
Thus, the PVH from the lease of the areas of the object of assessment will be: 14100 × 1375.8 = 19.398.780 rubles;
Calculation of the effective gross income (EGI) is made taking into account possible losses from underloading of delivered payments and losses in the collection of rent. For calculations, a value of 8% was taken, determined on the basis of available data from external sources and our own observations.
The calculations carried out showed that the EPD of the object of assessment is:
19.398.780 × 0.92 = 17.846.877.6 rubles
Table 11
Determination of the market value of the appraisal object using the method of direct capitalization of income
| Effective Gross Income (EVI) | RUB 17846877.60 |
| Operating expenses, | RUB 3,045,391.19 |
| including | |
| building tax | RUB 291,494.44 |
| insurance payments | RUB 53897.45 |
| · communal payments | RUB 1249281.43 |
| object management | RUB 392,631.31 |
| current repairs (4% of EVD) | RUB 713875.10 |
| Other expenses (2% of OR) | RUB 47115.76 |
| reserve for substitution (3.6% of the EVD) | RUB 642487.59 |
| Net operating income (NOI) before tax | RUB 14801486.41 |
| Net operating income (NOI) including income tax | RUB 11249129.67 |
|
Overall capitalization ratio (R0) |
0,19 |
| The value of the property being appraised is | RUB 60479191.77 |
Thus, the market value of the property, obtained using the income approach, is 60.479.191.77 rubles, or rounded 60.479.192 rubles. (Sixty million four hundred seventy nine thousand one hundred ninety two rubles) without VAT.
Chapter 3
3.1 Determination of the final value of the market value of the object of assessment
Applying various approaches to property valuation, we came to the following results:
Table 12
| Approaches (methods) | Weight coefficient | Cost, rub. |
| Cost approach (comparative unit method) | 0,35 | 25982918 |
| Market Approach (Direct Sales Comparison Method) | 0,25 | 44307639 |
| Income approach (direct income capitalization method) | 0,4 | 60479192 |
| Total cost | 1,00 | 44362607,85 |
The cost approach by weight is mainly used to evaluate objects that are unique in their type and purpose, or objects with little wear and tear. The building under appraisal belongs to the category of real estate objects with a low level of depreciation, therefore, the share of the market value value obtained using the cost approach will have a fairly high coefficient of 0.35.
The data underlying the market approach cannot be considered absolutely reliable, and therefore the results of the market approach to assessing the value of this object must be treated with caution. Based on this, the result of the market approach is given a weighting factor of 0.25.
The income value reflects the market behavior of a typical investor, so the result of this approach is assigned a maximum weighting factor of 0.40.
Thus, in our opinion, the following distribution of coefficients is the most objective:
Cost approach – 0.35;
· market approach – 0.25;
income approach – 0.40.
Taking into account the weight coefficients, the market value of the appraisal object as of 20.12.2007. is rounded 44.362.608 rubles. (Forty-four million three hundred sixty-two thousand six hundred and eight rubles) excluding VAT.
The value of a company's real estate is determined by its discounted future cash flows, and new value is created only when companies receive a return on invested capital that exceeds the cost of raising capital. Cost management further deepens these concepts, since in such a management system it is on them that the entire mechanism for making major strategic and operational decisions is built. Well-established value management means that all the company's aspirations, analytical methods and management techniques are directed towards one common goal: to help the company maximize its real estate value by building management decision-making on key value drivers.
Cost management is fundamentally different from the planning systems adopted in the 60s. It has ceased to be a function exclusively of the management apparatus and is designed to improve decision-making at all levels of the organization. It starts with the premise that a top-down command-and-control style of decision-making does not work, especially in large multi-business corporations. This means that lower-level managers need to learn how to use cost indicators to make smarter decisions. Cost management requires balancing the balance sheet on par with the income statement and maintaining a reasonable balance between long-term and short-term business objectives. If cost management is implemented and organized properly, the corporation reaps enormous benefits. Such management, in fact, is a continuous reorganization aimed at achieving maximum value.
For the object being evaluated, cost management is reduced to a more efficient use of available space.
The appraised building has an attic with a total area of 328.2 m2, which is currently partially used as a stationery warehouse. On the one hand, carrying out an appropriate reconstruction will make this room residential. On the other hand, in recent years, due to the expansion of cooperation between Kaluga enterprises and nonresident and foreign companies, the demand for hotel services has increased significantly. In this regard, it is proposed to carry out a comprehensive reconstruction of the attic to transfer it to the category of a residential attic, where it is planned to organize a hotel of 14 deluxe double rooms.
The cost of measures for the reconstruction of the attic is presented in Table 13.
Table 13
Estimated cost for the reconstruction of the attic
| № | Name of works | Cost, rub. |
| 1 | General construction works (dismantling) | 406.211 |
| 2 | General construction works (new) | 2.448.728 |
| 3 | Cold and hot water supply | 49.818 |
| 4 | Heating | 90.144 |
| 5 | Sewerage and plumbing equipment | 31.738 |
| 6 | Supply and exhaust ventilation and air conditioning | 67.534 |
| 7 | Electric power equipment and electric lighting | 422.402 |
| 8 | Communication device | 37.010 |
| 9 | Security and fire alarm | 114.531 |
| 10 | Automatic heating, ventilation | 7.638 |
| 11 | Room improvement | 872.640 |
| Total | 4.548.394 | |
To finance these works, it is planned to use a loan on the following terms:
· Loan amount – 5.250.000 rubles.
· Interest rate – 14% per year;
· Loan term – 1 year;
· Securing the property being valued;
· Loan repayment terms – quarterly payment of interest and principal in equal installments, i.е. for 1.866.506 rubles. at the end of each quarter.
As already noted, the hotel will consist of 14 deluxe double rooms. The cost of living in such a room in Kaluga hotels ranges from 1400 rubles. up to 2500 rub. per day. For calculations, the value of 1600 rubles is taken, since the object being evaluated is located close to the city center, but initially this building was not intended for the hotel business, which creates certain inconveniences for customers.
The investment horizon is set for 1 year, as there are no objective grounds to believe that the property being valued will not be sold after this period.
Movement Money presented in table. 14.
Table 14
Cash flow in RUB
| Item of expenses | 1st quarter | 2nd quarter | 3rd quarter | 4th quarter | Total for the year |
| Reconstruction | 4548394 | – | – | – | 4548394 |
| Loan service | 1866506 | 1866506 | 1866506 | 1866506 | 7466025 |
| Operating expenses | 124539 | 127030 | 129571 | 132162 | 513302 |
| income tax | - | 292073 | 291463 | 290841 | 874377 |
| Total | 6539439 | 2285609 | 2287540 | 2289509 | 13402098 |
| Item of income | 1st quarter | 2nd quarter | 3rd quarter | 4th quarter | Total for the year |
| Hospitality | – | 1344000 | 1344000 | 1344000 | 4032000 |
| Depreciation | 1299145 | 1302393 | 1305649 | 1308913 | 5216100 |
| Credit | 5250000 | – | – | – | 5250000 |
| Total | 6549145 | 2646393 | 2649649 | 2652913 | 14498100 |
| Balance | 9706 | 360784 | 362109 | 363404 | 1096002 |
The main source of income is the hotel business. At the same time, it is important to emphasize that with an excess demand for this type of service, no objective reasons for the low occupancy of rooms have been identified.
To determine how much the current market value of the property being valued will increase as a result of the recommended measures, it is advisable to use the capitalization ratio used in the income approach. This is due to the fact that this project is an investment project, i.e. focused primarily on income generation.
Consequently, the increase in the current market value of the appraisal object will be:
1.096.002 / 0.19 = 5.768.432 (rub.)
(Five million seven hundred sixty eight thousand four hundred and thirty two rubles) excluding VAT.
Conclusion
As follows from the provisions of the standards, "all methods, procedures and techniques for measuring market value, if they are based on market indicators and correctly applied, lead to the same expression of market value." At the same time, "any method based on market information is inherently comparative." Thus, according to existing standards, only the quality of information and the correct application of procedures can serve as a limitation on the use of a particular method.
In the first chapter of the work, the concept of real estate, types of real estate value, basic approaches, methods of real estate valuation, as well as problems associated with justifying the value of real estate are considered.
Real estate is physical objects with a fixed location in space and everything that is inseparably connected with them both below the surface and above the surface of the earth or everything that is a service item, as well as the rights, interests and benefits arising from the ownership of objects.
A real estate object is understood, firstly, as an enterprise as a whole as a property complex, and secondly, a land plot, an integral part of which may be: a building (structure) or a group of buildings; isolated water bodies, perennial plantings; engineering structures and networks; stationary structures landscaping of the territory of the site; elements of economic, transport and engineering support; other objects.
Real estate appraisal is carried out from the standpoint of three approaches: profitable, costly and comparative. Each approach allows you to emphasize certain characteristics of the object.
Each of the three considered approaches involves the use of its inherent methods in the assessment:
Method of direct capitalization of income;
Sales comparison method;
Comparative unit method.
Thus, in the event of a decrease in the efficiency of their use, real estate objects can change their purpose. This happens both as a result of depreciation of buildings and other improvements, and under the influence of trends in the real estate market.
In the second chapter, the valuation of the property was carried out using three approaches to valuation.
Each of the methods used has advantages and disadvantages.
The comparative approach provides a direct assessment of the market value, based on statistics on the real commercial real estate market. When processing the data, special measures have been taken to protect the creditor from overestimation. In this regard, the comparative approach is given the most weight.
The cost approach is the best way to take into account design features and the physical condition of the object of assessment. At the same time, the information base is not perfect. The main problems are related to the valuation of land. In addition, when calculating the replacement cost, one has to rely on average conversion indices to current prices, which can lead to errors.
The income approach is based on market data and avoids some of the disadvantages of the cost approach. The main source of error in the method is the uncertainty associated with the use of forecast data on income and growth rates.
In the third chapter of the work, the results of the assessment of the market value of the property were agreed, its final value was substantiated, and recommendations were given for increasing it.
Calculations showed that the market value of the appraisal object as of 20.12.2007. is rounded 44.362.608 rubles. (Forty-four million three hundred sixty-two thousand six hundred and eight rubles) excluding VAT.
However, the proposed value management measures make it possible to increase the current market value by 5,768,432 rubles. (Five million seven hundred sixty eight thousand four hundred and thirty two rubles) without VAT.
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31. Friedman J., Ordway Nick. Analysis and valuation of income-generating real estate. Per. from English. – M.: Delo, 1997. – 480 p.
32. Tsypkin Yu. A., Tsukanov I. L. Legislative acts, regulatory and administrative documents and standards for valuation activities: Teaching aid. – M.: Finance and statistics, 2003. 164 p.
33. Shcherbakov V. A., Shcherbakova N. A. Estimation of the cost of an enterprise (business). – M.: Omega-L, 2006. – 286 p.
34. Economics of real estate / Ed. A. B. Krutik, M. A. Gorenburgov. - M.: Lan, 2001. - 297 p.
35. Economics of real estate: Textbook. - M.: Delo, 2000
36. Avdeev A. P. Problems of real estate appraisal // Issues of appraisal. No. 1. - 2001. - p. 28-30
37. Akimova I., Biktimirova N. New approaches to the standardization of real estate valuation in the system of current legislation and real law enforcement practice // Law and Economics. - 2005. - No. 12. - With. 18-21
38. Gribovsky S. Mass real estate appraisal // Financial business. 2000. - No. 4. - With. 43-45
39. Gribovsky S. Real estate appraisal using the income approach // Problems of real estate. 2000. Issue. 2.
40. Gribovsky S. Economic and mathematical models of real estate valuation // Finance and credit. 2005. - No. 3. - With. 24-43
41. Grigoryeva I. L. Property valuation problems // Financial business. - 2004. - No. 1. - With. 48–49
42. Zelensky Yu. V. On the comparability of the results of approaches in real estate valuation - the principle of model consistency. Voprosy otsenki. 2005. - No. 4.
43. Loginov MP On the issue of real estate appraisal in Russia // EKO. - 2002. - No. 9. - With. 103–107
44. Ozerov E.S. The phenomenon of equilibrium price as the basis of the axiom of the theory of valuation // Real Estate Problems. 2000. Issue. 1. From 32–54.
45. Ozerov E.S. Economics and management of real estate. St. Petersburg: MKS, 2003.
46. Ozerov E.S. To the question of substantiation and use of the axiom of the theory of evaluation // Real Estate Problems. 2004. Issue. 1. From 3-5.
47. Patskalev A. F. Estimation of the cost of land // Issues of assessment. - 2006. - No. 1.
48. Official Website of the SBRF htpp:/www.cbr.ru
49. htpp:/www.cfin.ru
Clause 1 Article 30 of the Civil Code of the Russian Federation.
Economics of real estate / Ed. A. B. Krutik, M. A. Gorenburgov. - M.: Lan, 2001., p. 48-49
Substituting real data on the cost per square meter of apartments in the city of Novosibirsk in each quarter of 2006, it can be noted that this value falls within the boundaries of the confidence intervals built according to the model. According to experts, the resulting model adequately describes the current situation in the real estate market at the moment. The forecast of growth in the cost of housing by the end of 2006 for certain types of apartments coincides with real data, since the growth of the market predicted by experts is 20-30%. The appraiser is constantly faced with the problem of predicting the cost of apartments, this problem is especially acute when assessing for lending purposes. The correctness of the decision depends on the experience, qualifications of the specialist, as well as on the quality of the collected data on the market of the object being evaluated.
Introduction
After binding, the collections of prices are sent back to Gosstroy for their further approval. Currently, the process of developing a new regulatory framework has not yet been completed.
Conducting real estate valuation based on the new regulatory framework is a very complex and time-consuming task that requires special knowledge and skills. In order for the new regulatory framework to enter into the practice of valuation, it is necessary to carry out a set of works on the development of software and computing systems adapted to solving applied problems of real estate valuation.
Recently, regional centers for pricing in construction have begun to work actively, firms specializing in the provision of information services have appeared, for example, NPF Center for Information Technologies in Construction.
Suggestions for improving real estate valuation methods
When using these publications, it must be remembered that most of their calculations are based on the normative base of the planned economy, indexed by certain price coefficients and, therefore, the final results of the assessment may have a significant error for the reasons stated above. When applying certain indices, it is necessary to carefully study the prerequisites for their calculation.
Recently published and announced as the first in the country, expected by appraisers, the Regional Guide to Construction Costs (RCC-2006). It provides cost indicators by type of construction work, aggregated cost indicators (CSI) and "information for assessing the required amount of investment in the express option."
In fact, the latter definition refers to the estimated cost of objects-analogues of modern buildings and structures.
Residential real estate appraisal (3)
In particular, there has been an ever-increasing demand for valuation to reflect assets in financial reporting in accordance with IAS, US GAAP or Russian standards accounting; cost estimate intangible assets to determine the effectiveness of marketing and brand strategies; valuation for the purpose of making purchase and sale transactions, lease of assets, M&A and other transactions for the transfer of ownership and other real rights; valuation for the purposes of insurance, additional issue of shares or buyback of shares during the privatization of state-owned enterprises; appraisal for the purpose of lending secured by property, etc. . According to the results of a study by the Expert RA rating agency, the most demanded services over the past year and a half were real estate and business valuation services in general.
Thesis: residential real estate appraisal
FEDERAL AGENCY FOR EDUCATION GOU VPO "MOSCOW STATE UNIVERSITY OF SERVICE" Faculty: "Institute of Regional Economics and Municipal Administration" Department: "State and Municipal Administration" Course project. Topic: Improving real estate valuation methods.
Discipline: Management of municipal real estate. Completed by a student of the Group GRDS 3-2 Shevchuk M.V. Accepted by the teacher Dubovik M.V.
Improving real estate valuation methods
Thus, RCC collections should become the basic basis for real estate valuation. However, there are significant shortcomings of these collections.
The main one is that they do not provide the initial data and the main assumptions of the obtained values of the cost of analogues. So, it is not entirely clear what specific composition of the equipment is taken into account in the final indicators, what was included in the builder's other costs, etc.
The joint work of estimators, analysts and appraisers in the direction of improving the RCC can lead to the creation of an information base that is so necessary for real estate appraisers. The main direction in the development of appraisal activity is currently becoming the appraisal of the market value of real estate.
This becomes possible due to the fact that our country is accumulating a database of the actual market value of real estate.
Abstract: residential property valuation
Other situations for application: — feasibility study for new construction, — determination of the best and most efficient use of land, — renovation, — final price negotiation, — institutional and special purpose buildings, — insurance purposes. — method of market comparisons: assessment of the market value of property based on data on recent transactions with similar objects. It is assumed that a rational investor or buyer will not pay more for a particular property than it would cost to acquire another similar property with the same utility. - income method: the value of property is determined by the size, quality and duration of the period of receipt of those benefits that this object is expected to bring in the future.
20. methods of cost approach to real estate valuation (improvements).
Attention
Origin · Natural (natural) objects. · Artificial objects (buildings).2. Purpose · Free land plots (for building or other purposes) · Natural complexes (deposits) for their exploitation · Buildings For housing.
Scale Land plots. .Complex of administrative buildings. Building. Premises or parts of buildings (sections, floors).4. Ready for use Ready objects Requiring reconstruction or major repairs Requiring completion of construction. 1.2 Methodology for evaluating residential real estate.
Improving real estate valuation methods
So, in the collections of UPVS, the following cost items are taken into account: direct costs; overhead costs; Planned savings (profit); general site costs for the allocation and development of the construction site; cost of design and survey work; costs associated with the production of work in the winter; The cost of premium wages the cost of maintaining the directorate of a standing enterprise; · losses from the liquidation of temporary buildings and structures; · the cost of transporting workers over a distance of more than 3 km. in the absence of public transport; · the cost of paying employees bonuses for the mobile nature of work. Experienced appraisers in their calculations use their own developments based on adjustments to analogues or consolidated estimates.
In the work of P.G. Grabovoi, S.P. Korostelev “Property valuation, Part I.
Topic: Improving real estate valuation methods
Statistical indicators for this model confirmed the significance of the results obtained. Thus, the resulting model very well reflects the dependence of the average cost of apartments on its parameters in the housing market of the city of Novosibirsk (without taking into account extreme options).
The presented models were put into practice in the real estate agencies of the city of Novosibirsk "Zhilfond" and "Amir - Real Estate", which have full-time employees for assessing the cost of apartments for sale, as well as acting as collateral in loan agreements. It should be noted that experts highly appreciated the effectiveness of their application. The second important problem appraisers face is predicting the value of an apartment in the future.
Valuation of a residential property
Proposals for improving real estate valuation methods Conclusion List of references and sources Appendix INTRODUCTION Among the elements of a market economy, a special place is occupied by real estate, which acts as a means of production (land, administrative, industrial, warehouse, retail and other buildings and premises, as well as other structures) and a subject or object of consumption (land plots, houses, dachas, apartments, garages). Real estate is the basis of personal existence for citizens and serves as the basis for economic activity and development of enterprises and organizations of all forms of ownership.
In Russia, there is an active formation and development of the real estate market and an increasing number of citizens, enterprises and organizations are involved in real estate transactions.
INTRODUCTION
One of the most important resources of enterprises, organizations requiring effective management is real estate - land, buildings, structures and premises.
Real estate, on the one hand, is taxed, on the other hand, it can bring significant profit due to its efficient use. Without exaggeration, we can say that real estate can both contribute to the prosperity of an enterprise, and vice versa, its inefficient use leads to decline. In this regard, the development of a real estate management system is of particular importance in order to meet the needs of owners in obtaining the maximum income from their assets or in achieving another positive effect. To achieve a positive result, it is necessary to constantly monitor the use of real estate and find the most effective ways to manage it.
Effective property management is essential for the development of both the real estate market and the economy as a whole. In a market economy, real estate is an asset that connects the huge financial resources of market participants and ways to achieve the desired results.
In order to make decisions on the effective management of real estate, an enterprise must be based on a well-thought-out system for recording and using real estate, based on reliable and easily accessible information presented in various ways.
The relevance of the research topic lies in the fact that the Russian real estate market is not yet fully formed and does not have a strictly structured legal framework. An effective real estate management system will satisfy the needs of the market to the maximum extent, maximize budget revenues, increase liquidity and market value of objects.
The purpose of this work is to assess the effectiveness of real estate management in the city of Kazan and develop measures to improve it.
Consider the classification of real estate markets;
Explain the essence and economic role of real estate management;
Consider indicators for evaluating the effectiveness of property management;
Conduct an assessment of the effectiveness of the management of residential and office real estate;
Make proposals for improving the assessment of the effectiveness of property management.
The object of the study is the real estate market of the city of Kazan.
The subject of the study is a system for evaluating the effectiveness of real estate management.
The basis for writing this work is the legislative and regulatory documents in force on the territory of the Russian Federation, as well as special literature on the topic under study of the work of domestic and foreign economists involved in the study of issues of assessing the effectiveness of real estate management, the legislation of the Russian Federation, textbooks and literature of such authors as Kharlamov A. S, Buryak V.Yu., Raizberg B.A., Grinenko S.V., as well as the materials of the actual research conducted in Kazan for 2013-2014.
The first chapter examines the theory and practice of evaluating the effectiveness of real estate management. The second chapter evaluates and analyzes the effectiveness of real estate management on the example of residential and office real estate and formulates proposals for improving the assessment of the effectiveness of real estate management.
1. THEORETICAL AND MOTODOLOGICAL ASPECTS OF ASSESSING THE EFFICIENCY OF REAL ESTATE MANAGEMENT
1.1 CLASSIFICATION OF REAL ESTATE MARKETS
There are many definitions of the real estate market. All of them to some extent reflect the essence of the real estate market, however, some have striking differences from each other. In this thesis, the most simple, understandable and complete definitions are chosen, according to the author.
The real estate market is a system of arrangements by which buyers and sellers come together to determine a specific price at which an exchange of a specific commodity such as real estate can take place.
The real estate market is a sphere of capital investment in real estate and a system economic relations arising from real estate transactions. These relationships appear between investors in the sale and purchase of real estate, mortgage, delivery of real estate in trust, rent, lease.
The real estate market is a mechanism by which the interests and rights of buyers and sellers are combined, real estate prices are set.
The real estate market and the level of its development can be characterized through the development of the national economy. In development Russian market real estate, it is customary to single out the following stages.
The first and most turbulent period of development of the real estate market experienced in the early 90s. The opening and development of enterprises occurred due to the fact that demand was far ahead of supply, and as a result, incomes were very high. The starting point of this stage can be considered a permit for the privatization of apartments and, accordingly, the opportunity that has appeared for people to sell and buy apartments on their own. It was then that a significant number of businessmen and wealthy people appeared who wanted to improve their living conditions in a newly discovered way. That is, not the expectation of free municipal housing, not complex exchange schemes, but simply the direct purchase of apartments, which at that time were privatized relatively few. There were few sellers of apartments, but there were already enough buyers.
At the second stage, the law makes its corrections to the problem, namely, the first regulations regulating real estate activity in Russia. This period is characterized by the provision of significant benefits, which, while maintaining a good market environment, made it possible to receive good incomes, and attracted new entrepreneurs to this segment of the market. Housing prices began to rise, but in contrast to this, apartments became much more difficult to sell, and buyers became more picky. In particular, the sale with installment payment, the provision of loans secured by security, appeared and became widespread. Some firms began to work under non-standard contracts, undertaking an obligation to sell the client's apartment within a certain period.
The third stage is characterized again by the excess of demand over supply, tightening legislative framework, intense competition in the market, which together led to a drop in sellers' income. Small enterprises simply go bankrupt, medium and even large ones are on the verge of ruin. By the beginning of 1996, a natural decline in the cost of apartments began. The number of apartments offered for sale was increasing, while the number of potential buyers, on the contrary, was going down.
From the second half of 1999, a new stage in the development of the Russian real estate market after the August crisis of 1998 began - the stage of ending price reductions, the beginning of stabilization and some recovery. This took place against the backdrop of a favorable development of macroeconomic indicators in the country and, in particular, low (compared to autumn 1998) inflation rates, a smooth and limited devaluation of the ruble against the dollar.
Consequently, the real estate market, as it follows from the theory of a market economy, is cyclical, therefore it went through a recession stage, reached stabilization, and a new rise was expected ahead, including some price growth.
Real estate occupies a central place in any social structure, simultaneously performing two important functions: the means of production and the subject of personal consumption for living, recreation, cultural activities, etc. The economic and legal regulation by the state of various spheres of society and material production is closely connected with real estate objects, hence the following features of the real estate market.
Table 1.1.1 Features of the real estate market
|
Characteristic |
||
|
Localization |
Absolute immobility Great dependence of price on location |
|
|
Type of competition |
imperfect, oligopoly Few buyers and sellers The uniqueness of each object Price controls are limited Entering the market requires significant capital |
|
|
Elasticity of offers |
Low, with an increase in demand and prices, supply increases little Demand can be very volatile |
|
|
Degree of openness |
Transactions are private Public information, often incomplete and inaccurate |
|
|
Product competitiveness |
Largely determined by the external environment, the influence of the neighborhood The specificity of individual preferences of buyers |
|
|
Zoning conditions |
Regulated by civil and land legislation, taking into account water, forestry, environmental and other special rights Great interdependence of private and other forms of ownership |
|
|
Registration of transactions |
legal difficulties, Limitations and conditions |
|
|
Price |
includes the value of the object and associated rights |
Regional real estate markets can have significant differences among themselves. This is due to many subjective reasons, such as economic or natural conditions, as well as the regional legal framework, which is formed by local governments.
The real estate market has a branched structure and can be divided according to various criteria, for example, according to those presented in table 1.1.2.
Table 1.1.2 Classification of real estate markets
|
Classification sign |
Market types |
|
|
Object type |
Land, buildings, structures, enterprises, premises, perennial plantings, rights in rem, other objects |
|
|
Geographic (territorial) |
Local, city, regional, national, world |
|
|
Functional purpose |
Industrial premises, residential, non-industrial buildings and premises |
|
|
Degree of readiness for operation |
Existing facilities, construction in progress, new construction |
|
|
Participant type |
Individual sellers and buyers, resellers, municipalities, commercial organizations |
|
|
Type of transactions |
Purchase and sale, lease, mortgage, rights in rem |
|
|
Industry affiliation |
Industrial facilities, agricultural facilities, public buildings, others |
|
|
Type of ownership |
State and municipal facilities, private |
|
|
Transaction method |
Primary and secondary, organized and unorganized, exchange and over-the-counter, traditional and computerized |
As we can see from Table 1.1.2, there are quite a few types of real estate markets, the segmentation of which depends on the requested criterion.
For example, depending on the structure, the real estate market is divided into:
housing market;
Commercial real estate market;
Land market.
Each of the market segments can also be divided into specialized submarkets. Thus, the industrial real estate market can be subdivided into markets for industrial enterprises, the building of research institutes, or the housing market for primary and secondary housing, with and without finishing, from owners and from the state, and so on.
The differentiation of real estate markets is also associated with many economic, environmental, social and government factors, and, directly, with the functions that it performs:
Establishment of equilibrium prices at which effective demand corresponds to the volume of real estate supply;
Regulatory function, with the help of which resources are distributed among the spheres of the economy, its effective structure is formed, and public interests are satisfied;
Commercial function, which consists in organizing the movement of capital and making a profit;
Sanitation function, expressed in the cleansing of the economy from weak, uncompetitive and inefficient elements;
Stimulating function, which consists in the development of competition and the use of scientific, technical and managerial innovations in the pursuit of profit in the creation and use of real estate;
A social function, manifested in the growth of the activity of the population, striving to become owners of apartments, as well as other capital and prestigious objects.
Conclusion: real estate is the most durable commodity of all existing, ensuring the reliability of investments, although its value can both increase and decrease over time, under the influence of various factors. The real estate market received an impetus for development, in line with the development of the country's national economy. It is divided into segments based on the purpose of real estate and its attractiveness to various market participants. Also, each independent segment is further subdivided into many submarkets, so it is difficult to single out and generalize the most significant features for classification, since each market participant has his own most acceptable criteria for choosing a segment within which he is interested to enter into market relations.
1.2 ESSENCE AND ECONOMIC ROLE OF REAL ESTATE MANAGEMENT
Real estate is property (real estate), the management of which can be structured at the following levels:
Federal real estate management;
Real estate management of subjects of the Russian Federation;
Management of municipal real estate;
Real estate management of enterprises and organizations;
Management of individual properties.
The concept of "property management" is interpreted in two senses: broad and narrow.
In a broad sense, real estate management, as a rule, is understood as entrepreneurial activity for the performance of all work related to the execution of any powers of the owner of real estate permitted by civil law. For example, in accordance with the life cycle of real estate, the following rights are allowed for owners:
1. intention;
2. design;
3. manufacturing (erection, construction);
4. appeal;
5. use (service);
6. maintenance, operation, repair;
7. overhaul, modernization, reconstruction and restoration;
8. reprofiling;
9. recycling.
A narrow interpretation of real estate management reads as follows: “Real estate management is the implementation of a complex of operations for the operation of buildings and structures (maintaining them in working order, repairing, providing services, determining the conditions for renting out space, collecting rent, and so on) in order to most effectively use real estate."
Real estate is also understood as real estate, namely, we are talking about property management, that is, real estate management includes the management of all ensuing rights to real estate. The property under management is presented as a unity of legal, economic and physical characteristics.
In our opinion, it follows from this that management is primarily intended to ensure maximum efficiency in the use of real estate in accordance with the interests of the owner.
Real estate management is an activity in its field related to the definition of goals and setting tasks for planning, organizing, executing and controlling the useful, efficient use of real estate.
We believe that management activity is multifaceted in its essence and nature, coordinating the goals and objectives of owners, users, service companies and all subjects in one way or another connected with real estate.
In a market economy, real estate management is carried out in accordance with the law of supply and demand.
In addition to market conditions, tangible factors in real estate management are the legislation regulating it and the activities of various official bodies and institutions.
Real estate management can be internal and external:
Internal real estate management is the activity of a real estate market entity, regulated by its own regulatory documents (code, charter, regulations, rules, contracts, instructions, etc.).
External real estate management is the activity of state structures aimed at creating a regulatory framework and monitoring compliance by all subjects of the real estate market with established norms and rules.
Real estate management activities are carried out primarily in the three most significant aspects - legal, economic and technical. The legal aspect of real estate management is the most rational use, distribution and combination of rights to real estate.
The economic aspect of real estate management is implemented through the management of income and expenses generated during the operation of real estate. In other words, the manager has the right to fully and independently, within the framework of the law, control and regulate the income and expenditure part of real estate ownership, as well as operate it at his own discretion.
The technical aspect of control is to maintain the control object in a healthy state in accordance with its functional purpose.
Real estate management is a comprehensive approach to improving and maintaining the condition of an object, organizing and predicting its development, the way it is operated in accordance with its intended purpose. The concept of real estate management also includes, first of all, such actions as renting out and managing office buildings, that is, real estate management as a means of attracting investments. On the other hand, property management can also be viewed as an investment itself. Based on the foregoing, we have identified the following goals for managing the real estate market:
Implementation of the constitutional rights of citizens to real estate and obligations associated with its possession;
Establishment in the market of a certain procedure and conditions for the work of its participants;
Protection of participants from dishonesty, fraud and criminal organizations and individuals;
Ensuring free pricing of real estate objects in accordance with supply and demand;
Creation of conditions for investments, stimulating entrepreneurial activity in the sphere of production;
Fair taxation of real estate and real estate market participants.
To achieve these goals, in our opinion, it is necessary:
1. to form a complete register of state real estate (balance of real estate), containing quantitative, cost, technical and legal characteristics of real estate objects;
2. clearly delineate and coordinate the powers of all state authorities involved in the process of real estate management;
3. to form objects of management, excluding the possibility of disposing of one part of the object without the other in cases where they form a single whole (as a rule, these are land plots and buildings and structures located on them);
4. ensure the unconditional application of the market valuation mechanism when using real estate;
5. create conditions for attracting investments in the real sector of the economy by maximizing the involvement of real estate in civil circulation;
6. regulate the issues of state acquisition of real estate objects, including by defining the goals for the achievement of which the acquisition of these objects is carried out;
7. to use for effective real estate management a mechanism for reimbursement of expenses for real estate management (including inventory and valuation), similar to civil law, since the state, when using its real estate, participates in civil circulation on an equal basis with its other participants;
8. change the existing mechanism for the sale of real estate, as it allows the acquisition of objects at low prices;
9. Establish for all constituent entities of the Russian Federation a unified procedure for making decisions on the use of federal real estate (primarily in relation to leased objects), ensuring prompt decision-making;
10. provide professional training for civil servants managing federal real estate.
An object of management in the field of real estate is an immovable thing or a set of immovable things, considered as a single object from the point of view of organizing the most effective management of them, taking into account the costs of maintenance and management.
Summing up the above, we can say that real estate management is certainly a complex and multifaceted process, which includes many different factors and aspects. The management mechanism contains not only the rights and obligations of the owner of the property, but is also subject to state intervention, including the reinforcement of the management of the legislative framework.
1.3 REAL ESTATE MANAGEMENT PERFORMANCE INDICATORS
To implement the procedure for evaluating the effectiveness of real estate management, various approaches and indicators are used. In theory, there are no clearly defined indicators by which it is possible to determine the degree of efficiency of real estate management, since in practice any chosen indicator may not be effective for a single enterprise, and the experience of a single enterprise may not be applicable for larger distribution.
However, it is customary to consider the approach of evaluating the effectiveness of financial indicators. Indeed, if a company is the owner, for example, of an administrative building and its business is to rent out the premises, then this approach will not be difficult, since all the necessary information is on hand, whether on the one hand the cost of staff, repairs and equipment buildings, maintaining communications in good condition, and on the other hand, the amount of payments received from tenants is clearly defined.
Table 1.3.1 Analysis of the main technical and economic indicators of the enterprise NCF "Audit and Evaluation"
|
Indicators |
Absolute deviation, thousand rubles |
Growth rate, % |
|||
|
Net revenue, thousand rubles |
|||||
|
Cost of services, thousand rubles |
|||||
|
Gross profit, thousand rubles |
|||||
|
Selling and administrative expenses, thousand rubles |
|||||
|
Profit from sales, thousand rubles |
|||||
|
Profit before tax, thousand rubles |
|||||
|
Net profit, thousand rubles |
|||||
|
Average annual cost of fixed assets, thousand rubles |
|||||
|
Average number of employees, people |
|||||
|
Labor productivity, thousand rubles/person |
|||||
|
Profitability of production, % |
3 percentage points |
||||
|
Return on sales, % |
4 percentage points |
||||
|
Return on assets rub per 1 rub |
But if the company is a large owner of industrial real estate, the problem arises of obtaining the full information required to assess the effectiveness of real estate management. The financial statements do not show such factors as:
Market promotion of a new product;
Potential opportunities of the company;
The interest of employees in the success of the company;
Customer loyalty, etc.
Although such non-material indicators are reflected and rightfully occupy their niche in assessing the effectiveness of real estate management.
From the point of view of economics, the fundamental principle "efficiency - the ratio of results to costs" does not always allow for a correct assessment of efficiency. This is due to several factors:
Features of the information age, namely its essential features - the increasing role and importance of the information resource, intangible assets;
The complication of economic life - an increase in the degree of its openness, globalization, competition;
Changing the content of results and costs, and, accordingly, the difficulty in determining their values;
The rapid development of the system of values and, consequently, the change in the system of indicators, characteristics and indicators, which together reflect the effectiveness of activities.
B.A. Reizberg and V.Yu. Buryak, considering the issues of efficiency in relation to state property, note that “a specific methodology for assessing the economic, social, functional efficiency of managing a certain class, group of property objects of state property, which varies in relation to the estimated method of using the property complex, is designed to make it possible to establish the value, magnitude performance indicators. But these indicators do not have a universal character, they largely depend on the object of assessment, the purpose and nature of the application of this object. As a result, the conclusion is made "it should be recognized as impossible to create a single universal methodology for evaluating effectiveness" .
With the exception of the traditional approach, among modern approaches, they also single out the most promising system of balanced scorecards (BSC) developed by R. Kaplan and D. Norton. They singled out the four most important components in evaluating efficiency: financial activities, relations with consumers, organization of internal business processes, training and development of personnel. The essence of the BSC is to achieve a balance between the number of internal and external, objective and subjective indicators. Another advantage of this approach is that this system, according to the authors, is quite flexible and "creative" regarding its implementation in any production.
Taking into account the provisions of the general concept and strategy that the company adheres to, the accumulated experience in methodological support for performance assessment, it can determine specific performance indicators for assessing real estate management based on the BSC (see Appendix 1).
The most important detail for creating a BSC are, as in the traditional approach, two financial results: cost reduction and income increase. Based on this, we can include in the BSC such indicators that, provided they are consistently achieved, allow us to most fully assess the effectiveness. We can introduce such indicators at any level within the BSC.
Based on Appendix 1, we can identify several performance indicators for real estate management. These indicators include each separately from four components. All indicators are considered, comments are given in the tables below.
Table 1.3.2 Criteria for the effectiveness of real estate management (financial component)
Table 1.3.3 Criteria for the effectiveness of real estate management (client component)
|
Strategic Initiatives |
Performance indicators |
|
|
Provision of additional services |
1. Program for determining the demand for additional services and their relevance; |
|
|
2.Organization of contractual work in order to provide additional services; 3. Development of criteria for assessing the quality of services provided |
||
|
Improvement of work with clients |
1. Saving existing customers and ensuring their interest in continuing cooperation; 2. Development of a mechanism for the qualitative and operational study of incoming proposals for various projects. |
|
|
Formation of the image of a "corporate citizen" |
1. Program for media coverage of the social role of the company (social programs, paid taxes, etc.) 2. A program aimed at developing in the minds of people an understanding of the importance of the activities performed by the company, their interest in this activity; 3. Carrying out activities aimed at improving the environmental situation at the company's facilities |
Table 1.3.4 Criteria for the effectiveness of real estate management (component of business processes)
|
Strategic Initiatives |
Performance indicators |
|
|
Orientation in the use of real estate to a combination of interests of the company and customers |
1. Providing a favorable offer for customers; 2. Carrying out polling activities in order to find out what changes dealers would like in the company's activities; 3. Determination of services and goods "discharged" to end consumers; 4. The program of monitoring and meeting the demand of consumers, their wishes. |
|
|
Improving the actual management activities |
1. Change and optimization of the internal structure of the company; 2.Social development program; 3. Improvement of accounting forms |
|
|
Intensification of the use of real estate |
1. Active introduction of saving technologies; 2. Determination of real estate objects to be repaired; 3.Determination of the company's costs for the maintenance of real estate; 4.Programme to streamline the costs of maintaining real estate and reduce them |
|
|
Innovations in property management |
1. Ensuring prompt application |
|
|
denial of promising innovations; 2. The program of operational development of innovations in the field of real estate, determining their effectiveness and expediency of implementation |
Below is a description of the criteria for the effectiveness of real estate management, constituting a block of growth and learning.
Table 1.3.5 Performance Criteria for Real Estate Management (Learning and Growth)
|
Strategic Initiatives |
Performance indicators |
|
|
Staff training in modern management techniques |
1. Correspondence of the level of knowledge of the employee to the work performed; 2. Determining the knowledge and specialties that employees should be trained in; 3. Program for further monitoring of the level of knowledge of employees |
|
|
Access to information resources |
1. Introduction of new technologies; 2.Creation of places for visual information about the results achieved and new tasks in the subdivisions |
|
|
Creation of conditions for personnel activity |
1. Active participation of each employee in the activities of the company; 2. The program of social protection of workers |
|
|
Reward system for achieving set goals |
1. Establishing the dependence of remuneration on performance results; 2. Definition of performance indicators for departments and individual employees 3. Informing the team about the achievements of colleagues. |
In other words, analyzing Appendix 1, in our opinion, we can say that the real estate management system is:
The degree to which the company's goals are achieved when using various limited resources, including real estate;
The degree to which the goals of real estate management as a business process with the lowest costs are achieved;
The ability of the real estate management system to meet the evolving needs for real estate, taking into account its rational and economical use;
The ability of managerial influences to ensure the reproduction of consumer properties of real estate of the required quality at the lowest cost.
Within the framework of individual corporations, the following properties are assigned to the control for assessing the effectiveness of property management:
1. Sustainability of the strategic direction of functioning;
2. A clear vision of the future;
3. Diversification of management decisions;
4. The effect of interrelated actions;
5. Constancy and variety of changes;
6. Ability to perceive innovative technologies.
On the other hand, in our country they almost do not comply with the criteria and recommendations outlined above in the tables.
So, summarizing the above, we can say that there are no generally accepted indicators for evaluating the effectiveness of the use of real estate, however, there are several generalized approaches to address this issue. One of the approaches is based only on the financial result of the activity of an enterprise, organization, corporation, while the second one includes several stages, at each of which certain criteria are selected for evaluating efficiency. On the other hand, the head of any organization is relatively free to make a decision on performance evaluation and can create a certain system of indicators for himself, according to which he will be guided in order to achieve certain goals of the corporation.
residential office real estate appraisal
2. ANALYSIS OF THE EFFICIENCY OF REAL ESTATE MANAGEMENT IN KAZAN
2.1 ASSESSING THE PERFORMANCE OF RESIDENTIAL PROPERTY MANAGEMENT
To assess the effectiveness of residential real estate management, the author identified the following, the most significant indicators and criteria in his opinion:
The total area of residential premises put into operation in 2014;
The price of residential real estate;
Estimated sale price dynamics;
The influence of external factors on residential property
The first half of 2014 was marked by important events in the country's economy, which also affected the housing market of the Republic of Tatarstan: the depreciation of the ruble, the imposition of sanctions by the West and socio-demographic factors, on the one hand, and a large selection of offers from developers, along with lower mortgage rates, with another.
In the wake of increased demand, developers actively erected housing. So, at the beginning of July, more than 1.2 million sq. m of housing - almost 51% of the annual target. By the end of the first half of the year, Kazan took first place among the cities of the Volga Federal District in terms of commissioned housing: in total, more than 508 thousand square meters were commissioned. m.
In 2014, the percentage of buying apartments in new buildings increased - about 40% of transactions in Kazan are carried out with the involvement of mortgage funds. Mortgages tend to be taken out over the long term, so borrowers are wise to choose newer homes.
Rosreestr's data for the Republic of Tatarstan testify: in the six months of 2014, 45.3 thousand contracts were registered in the republic, which is 11% more than in the same period last year. Of these, 65% - housing, 22% - land, 13% - non-residential premises.
The increased demand also spurred prices on the market: in the first half of the year, real estate prices in the city grew faster than usual (within 6-8% in the first six months in the primary market).
According to the "Real Estate Server of Kazan and the Republic of Tatarstan", the average cost per square meter by July 2014 amounted to 67.5 thousand rubles in the secondary housing market, 50.7 thousand rubles in the primary housing market, and in particular in the current situation on In the real estate market of Kazan, the leaders-developers are Unistroy, YIT Kazan, Ak Bars Real Estate, Tatstroyinvest, and they put forward the following prices for their real estate:
Table 2.1.1 Comparative analysis of housing projects in Kazan for the second half of 2014
|
Developer |
Deadline |
Apartment area |
Price, million rubles |
||
|
LCD "Emerald City" (Privolzhsky district) |
"Unistroy" |
1st half of 2014 |
|||
|
LCD "Sovremennik" (Novo-Savinovsky district) |
YIT Kazan |
IV quarter 2014 |
|||
|
LCD "Svetlaya Dolina" (Sovetsky district) |
Ak Bars Real Estate |
IV quarter 2014 |
|||
|
Residential complex "Rainbow" (Kirovskiy district) |
"Tatstroyinvest" |
III quarter 2014 |
The cost of apartments is usually affected by location: the so-called Khrushchev in the Vakhitovsky district will be much more expensive than the same apartment in the Aviastroitelny or Kirovsky district. In addition, the cost is affected by the general condition of the apartment, the number of storeys and the material from which the house is built. In remote areas of the city, stalinkas and dormitories can stand idle for months waiting for their buyer.
One-room Khrushchev with an area of 32 square meters. m in Kazan today cost from 1.9 million to 2.25 million rubles, Leningrad (34 sq. m) - from 2.2 to 2.8 million, "odnushki" of the Moscow project (30 sq. m) - from 2.15 to 2.35 million.
A two-room Khrushchev building (43 sq. m) is estimated at 2.2-2.7 million rubles, a Leningrad one (51 sq. m) - from 3 to 3.5 million, a Moscow project - from 2.4 to 3 million. three-room apartments prices are as follows: Khrushchev (56 sq. m) - 2.7-3.3 million rubles, Leningrad (65 sq. m) - 3.4-3.8 million.
It should also be noted that housing stock Republic at the end of 2014 numbered 1618 thousand apartments (including houses that are privately owned by citizens), of which 1130.9 thousand apartments (69.9%) are located in apartment buildings. The average size of one apartment is 56.5 sq.m of total area. The general housing stock is invariably overwhelmingly privately owned.
The housing market in 2014 was actively developing in the sector of purchasing housing with the help of mortgages. About half of the registered real estate transactions were mortgage lending, which gave impetus to the intensive development of the residential construction branch, which some developers did not fail to take advantage of.
In order to predict the development of the housing market in Kazan for 2015, let us consider the dynamics of prices for renting and buying housing.
Table 2.1.2 Dynamics of prices for renting a one-room apartment in Kazan in 2011-2014
Based on the tables above, the author has compiled three forecasts for the development of the housing market: optimistic, moderate and pessimistic. The optimistic forecast was based on the fact that rent inflation will be comparable to consumer inflation, which is projected at 10% in 2015 . On this basis, we assume that the level of growth in the cost of renting apartments will be at the level of 10% per year.
A moderate forecast is an average level of growth between an optimistic and a pessimistic forecast, by which the cost of renting and buying an apartment in 2015 will decrease by 10% per year.
The pessimistic forecast was made on the basis of the reasoning that if we take into account the crisis of 2008-2009, when similar processes took place (the factor of the cost of money and their impact on the price of residential real estate, as well as the fall of the ruble), the cost of renting and buying an apartment fell by 30%.
Table 2.1.4 Moderate forecast for renting and buying an apartment with the help of mortgage lending in Kazan for 2015
|
Forecast(-10%) |
Forecast(-10%) |
The moderate forecast says that renting and buying an apartment with the help of mortgage lending will fall by an average of 10% from the previous year.
Table 2.1.5 Optimistic forecast for renting and buying an apartment with the help of mortgage lending in Kazan for 2015
|
rub./kV m. |
RUB/ sq.m |
|||||
|
Forecast (+10%) |
Forecast (+10%) |
The optimistic forecast assumes an increase in rent and mortgage payments by 10%, taking into account inflation.
Table 2.1.6 Pessimistic forecast for renting and buying an apartment with the help of mortgage lending in Kazan for 2015
|
Forecast(-30%) |
Forecast(-30%) |
According to a pessimistic forecast, rent and mortgage lending should fall by 30% next year.
Based on the forecasts and tables, as well as the considered dynamics of the purchase price and the dynamics of the rental price, we can say that prices in the housing rental market next year will be extremely unstable and will presumably range from 12,700 thousand rubles to 15 600 thousand rubles, and on the purchase market with the help of mortgage lending from 45,000 thousand rubles. up to 70,576 thousand rubles.
According to the author, a pessimistic forecast should be considered the most likely scenario for the development of events. From the above comparative analysis, it can be seen that prices in the housing market are extremely volatile due to the following reasons:
1.) the impact of Western sanctions;
Western sanctions came into effect at a time when Russia had the highest pace and volume of housing construction, the largest number of take-overs by individuals mortgage loans and the most accessible interest rates by them.
The consequences of sanctions on the real estate market can be divided into two categories: what happened and what is expected.
Among the events worth noting:
1. Foreign investors postpone the implementation of development projects in Russia (in various market segments) until the situation in Ukraine is resolved.
2. Banks analyze incoming new development projects more carefully.
3. Real estate as an asset (especially Residential Properties- apartments in the primary and secondary markets) has increased its attractiveness for private investors”.
Regarding the expected consequences of sanctions on the real estate market, we can say the following:
1. Banks are expected to increase interest rates on consumer and mortgage loans due to an increase in the cost of funds in the market. At the same time, a number of banks can independently limit the activity of mortgage borrowers by setting artificially high interest rates.
2. Decrease in the volume of financing of investment development projects by banks may cause a decrease in the volume of new construction in 2015.
3. The rental housing market may lose an audience consisting of foreigners working in Russia under a contract or in Western companies, whose activity may significantly decrease during the period of sanctions. (The author will also note that at the same time, opposite processes can occur in the rental housing market: if the value of real estate falls, then banks will have to increase interest rates on mortgage loans. This will significantly reduce the purchasing power of citizens, which will lead to an increase in the number tenants).
4. The largest Russian banks are more likely to continue lending to development projects that are at the active / final stage of construction readiness.
2.) the influence of the currency factor;
The first approach: the impact of the exchange rate on the housing market.
An important element of economic relations associated with the acquisition of housing is the exchange rate. The exchange rate has an impact on various indicators that connect the buyer and seller in the housing market. The exchange rate is the ratio of two monetary units in the foreign exchange market, which is formed depending on the supply and demand of a particular currency, as well as on a number of other factors.
Depending on the ratio of supply and demand of a particular currency, the exchange rate is most often determined, which is why it cannot be a constant value, since demand and supply in the foreign exchange market are constantly changing.
The second approach: the impact of housing prices on the national currency.
There is a direct relationship between the price of real estate and the exchange rate of the national currency; when the value of real estate falls, the exchange rate of the national currency also decreases. This dependence is due to the fact that, as a rule, a decrease in the cost of housing indicates unfavorable processes in the economy - an increase in unemployment, a decrease in purchasing power population. All this leads to a decrease in demand for real estate.
Based on the above, in the current real estate market conditions, the first approach will be more reflected. The second is the most probable given the stable development of the economy.
3.) the influence of socio-demographic factors.
It is generally accepted that the formation of needs in the market cannot be controlled. However, needs arise and change according to certain patterns, an important part of which is the mentality, way of life of the population. Of these, we consider in more detail the following most important, in the opinion of the author, factors:
1. Number of inhabitants locality has a significant impact on the structure of consumption, primarily due to a higher level of income in large settlements.
2. Consumer behavior is also influenced by situational criteria. Currently, these include the work of the state aimed at stimulating the development of housing construction by increasing the availability of various social programs, in particular:
Maternity capital (program valid until 2016 inclusive);
military mortgage;
Social mortgage;
Mortgage under the Young Family program, etc.
3. In the summer of 2014, the state made changes to the rules for mortgage lending. On July 25, Law No. 169-FZ “On Amendments to Articles 31 and 61 of the Federal Law “On Mortgage (Pledge of Real Estate)” came into force. The changes in the law contain two important points. First, banks will be able to insure their financial risks in case they need to foreclose on the collateral and its value is less than the amount of the debt. The second - the availability of such insurance (from the bank or from the borrower) exempts the borrower from subsequent payments on the loan. The same happens in case of bankruptcy of the insurer that issued such insurance.
Summing up the foregoing, we believe it can be said that the imposition of sanctions will certainly have a negative impact on all areas of the Russian economy. Regarding the housing market, it should be noted that due to sanctions, rates for mortgage lending and this segment of the housing market will lose a significant number of consumers. But against this background, the rental market, on the contrary, is able to increase its area of distribution. Thus, that part of the population that previously planned to purchase housing on a mortgage may abandon this idea in favor of a rental mechanism, i.e. it will be more profitable to rent housing at relatively stable prices (the projected rental price is from 10,000 to 15,600 rubles / month, depending on the nature of the forecast) than to apply for a mortgage in conditions of currency instability (for example, as of March 24, 2015, the ratio of the dollar to the ruble is 1/58, 28, and on 03/14/2015 it was 1/61.32)
Now there is a sharp rise in the entire housing market as a whole, this is due to the fact that, due to the appreciation of the dollar, people tend to sell their money in real estate, but this trend cannot be long-term and promising, because. Consumers are forced to take such actions by constant tension over the exchange rate, which can ultimately lead to inflation or, moreover, to the collapse of the Russian monetary system.
The socio-demographic factor, of course, does not have such a big impact on the real estate market as, for example, the currency factor, but without them, the housing market, in principle, cannot exist as such, since the speed, construction volumes, mortgages, rent, etc. are determined precisely on the basis of an analysis of various, mostly non-economic factors. The birth rate, population, average income of a person, the number of young families and other social indicators - these are the most common ideas about the real estate market and the country's development potential.
In general, the residential real estate market is a combination of many economic and non-economic factors, which, either individually or in combination, provide an idea of the economic situation in a particular market segment.
The three forecasts presented by the author reflect economic essence the influence of various factors on the mechanisms of housing acquisition. In the conditions of an unstable economic situation in the country, it is impossible to speak with full confidence about the effectiveness or inefficiency of real estate management, however, as studies have shown, the segment of the real estate market - the housing market, remains the most fundamental in relation to other elements of the economy and due to the funds raised, it can relatively maneuver smoothly between the changing external environment.
2.2 ASSESSING THE PERFORMANCE OF OFFICE PROPERTY MANAGEMENT
In the commercial real estate market, namely in the office real estate segment, in our opinion, three directional sectors have formed:
The first sector - includes prestigious offices that meet international standards for administrative premises. From here we can conclude that the rent in such premises is often very high. This becomes the main reason why some Russian entrepreneurs rent first-class offices abroad at more affordable prices.
In the second sector, we included offices that are located in well-finished and equipped premises, and recently the practice of buying out large apartments with subsequent high-quality repairs has become popular. Here, rental payments are quite acceptable for successfully operating companies. There is a constant active demand in this sector.
As the third sector, we defined premises in the buildings of the municipal and departmental non-residential fund, state enterprises (mainly scientific institutions), cooperative and private enterprises. These are premises without finishing and repair, and other related services. Rents here are usually not high at all.
In our opinion, freedom of entrepreneurship leads to the creation of more and more new business structures, which, first of all, will need premises for their functioning, which means that the office space market has more than a good development prospect.
Rice. 2.2.1 The ratio of classes of business centers in Kazan at the end of 2014
The Kazan office real estate market includes high-quality business centers of all three classes: A, B, and C. As of the end of 2014, the city's provision with high-quality office real estate is 183 sq. m. m per 1,000 inhabitants.
Category B offices are similar in most characteristics to class A offices, however, they are not as prestigious, have a less favorable location, and not as wide a range of services as class A offices. Practice shows - in the category of class B, sometimes offices of the highest category pass. This happens, for example, after several years of intensive use. The factor of quality standards also plays an important role here. Technologies are in constant dynamics, so what used to be "the latest" is gradually moving into the category of "new".
The total supply of office space in the city of Kazan is over 410,000 sq.m. Of these, about 210 thousand square meters. m refers to a quality proposal.
As it is right, in big cities, the demand for high-quality office space remains stable. The vast majority of business centers of class "A" in Kazan has almost 100% occupancy, namely, such business centers as: "Business Center Suvar Plaza", "Korston", "Business Park Idea". Class "B" objects also have a fairly high occupancy rate, it ranges from 85% to 90%. Speaking about the demand for office premises, we should mention the fact that recently there has been a tendency to shift business activity to the outskirts of Kazan. This is most influenced by such factors as: insufficient transport accessibility (traffic jams), lack of parking spaces or their payment.
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