Objective:

Your task is to conduct a comprehensive property valuation for the residential property based on the provided information. Utilize appropriate appraisal methodologies (e.g., sales comparison approach, cost approach, income approach) to determine the fair market value of the property in the current market conditions in Metro Manila.

Scenario: Residential Property in Metro Manila

Location:

The property is located in a prime residential area within Metro Manila, the capital region of the Philippines. Specifically, it is situated in a gated community in Quezon City known for its high-end residential developments. The neighborhood is characterized by its proximity to commercial centers, schools, hospitals, and major transportation hubs.

Size:

The property consists of a two-story single-family home built on a lot measuring 300 square meters (approximately 3,229 square feet). The house has a total floor area of 250 square meters (approximately 2,690 square feet), including four bedrooms, three bathrooms, a spacious living area, dining room, kitchen, and a garage for two vehicles.

Condition:

The house is well-maintained and in excellent condition, with modern architectural design and quality construction materials. It features contemporary interiors, high ceilings, large windows for natural light, and amenities such as air conditioning, built-in cabinets, and a landscaped garden.

Market Data:

• Comparable Sales: Recent sales of similar residential properties in the neighborhood have ranged from PHP 15 million to PHP 20 million.
• Rental Rates: Average rental rates for similar properties in the vicinity range from PHP 60,000 to PHP 80,000 per month.
• Economic Trends: Metro Manila's real estate market is experiencing steady growth, driven by factors such as population growth, urbanization, and strong demand for residential properties. The city's economy is diverse, with thriving industries such as BPO services, manufacturing, and real estate development.

Additional Information:

• Zoning Regulations: The property is located in a residential zone with regulations governing building height, setbacks, and land use restrictions.
• Property Taxes: The annual property taxes for the house are PHP 30,000, based on the assessed value by the local government unit.
• Market Competition: While there is competition from other upscale residential developments in the area, the subject property's location, size, and condition contribute to its attractiveness to potential buyers or renters.

GUIDE INFO

1. Sales Comparison Approach

The sales comparison approach determines the value of a property by comparing the selling prices of similar, recently sold properties in the same geographical area. This method relies on sales data, where at leastthree properties should be used by the appraiser to determine the current value of the property in question.

While evaluating the value of a particular property, there may be price adjustments to expect. If the subject or target property does not contain a feature or two found in the comparable property, the price is reduced according to the value that can be had from the given feature. Accordingly, if the subject property possesses a valuable feature not found in the other property, the former's value increases.

2. Cost Approach

The cost approach estimates the value of a property based on how much it would cost if it were to be reconstructed. In this method, the property's value is determined by calculating the cost required to build an equivalent structure. The estimate particularly includes the cost of land and construction expenses.

3. Income Capitalization Approach

The income capitalization approach is often used in estimating the value of income-producing properties such as apartments,office buildings, and shopping centers. This method is based on expected future benefits; hence, the value of the property is tied to its yearlypotential gross income.