To find the value of any piece of property, the assessor must first know what similar properties in the same neighborhood are selling for, what it would cost to replace it today, how much it takes to operate and keep it in repair, what rent it may earn, and many other factors affecting its value, such as the current rate of interest charged for borrowing money to buy or build properties like yours.
Using these facts, the assessor can then go about finding the property's value in three different ways:
Sales Comparison Approach:
Compare a property to similar properties that have sold recently. Requires sales prices to be very carefully analyzed to ensure a true and accurate picture – i.e. was any personal property included in the sale? Multiple sales are then analyzed to arrive at a fair valuation of subject property. Other important factors: size, quality, condition, location, and date of sale.
Considers the level of investment required, at current material and labor costs, to replace subject property with a similar one. Depreciation factors heavily into valuing any existing property - value lost to wear and tear, obsolescence. Such adjustments are subsequently deducted from the replacement cost new. Estimated value of the subject land + depreciation cost = total property value.
Evaluates the potential income produced by a property if it were rented as an apartment, retail, office, etc. Factors include: operating expenses, taxes, insurance, maintenance costs, and the reasonable rate of return to be expected on the property. This method is seldom used to appraise single-family residential properties.
Contacting your Appraiser
The Real Estate Valuation office maintains a full-time staff of appraisers who are happy to assist property owners with questions regarding their assessment anytime during the year. To contact the Real Estate Valuation office, call 540-853-2771 to speak with the appraiser assigned to your neighborhood or by email.