With the various commercial properties for sale in Pataudi Road Gurgaon, the question is what is the correct value? Are you paying too much or are you getting a great deal? How do you tell?
With residential units the process is a bit different and depending on the particular property can be easier. Residential property is usually valued based on comparables. What did a similar unit sell for?
When you have unique individual single-family homes this can be a bit tricky. But when you have a large building with many units, there are a lot of similar properties to compare sales to. There may some differences because the higher floors have a better view and one side of the building might be preferred over the other, but generally, it is fairly straightforward.
Commercial properties are valued differently. Usually, they are valued on the cash flow on the rent that they bring in. If a company owns its own building then you have to look at comparables or use other valuation methods. Typically though, you look at what the income is on the property and what the expenses are and the net profit or net operating income. Then you use a capitalization (or cap) rate to calculate the value.
The cap rate will vary some depending on what is going on in the economy and the local market. A 10% cap rate would mean that a property is valued at 10 times the net operating income. An 8% cap rate would mean multiplying the NOI by 12.5 to get the property value.
For commercial properties for sale in Pataudi Road Gurgaon, some of the buildings are not completed yet and therefore don’t have a rental history to base the valuation on. Therefore, you might look at the value of comparable properties nearby or you might base it on the cost to build the building.