In the asset value method, the land value is determined separately from the value of the property built on it. The final market value is obtained by adding both values. This method is used in particular for owner-occupied detached and semi-detached houses.
The land value is usually determined on the basis of the comparative value method with the help of data from the local expert committee. For the calculation of the building value according to the asset value method, the production or reconstruction costs of the building (asset value) are decisive. Among other things, the size of the living space, the quality of the construction, the presence and condition of outdoor facilities such as garages, terraces and gardens are included in the analysis.
The basis of this methodology is the construction costs that would arise if the building were to be rebuilt in this form. For these construction costs, the experts can refer to special tables. The following applies: The construction costs of a mid-terrace house are on average lower per square metre than for a detached single-family house.
The degree of wear and tear and the remaining useful life of the property are derived from this value. As a rule, experts assume a total useful life of 80 years for a residential property. For each year that a building has on the hump, a reduction in value of 1.25 percent of the determined building value is deducted. Example: If the structural production costs were calculated at 170,000 euros and the property is 15 years old, then the value is reduced by around 31,900 euros to 138,100 euros.
You can "stop" this automatic loss of value by comprehensively modernising the property. If, for example, a Gründerzeit house is comprehensively renovated and equipped with contemporary technology (heating system, windows, balconies), then it has the quality of a new building again.
Value-reducing factors such as renovation backlogs or defects such as damp cellars are also taken into account. Finally, the so-called market adjustment factor is used in the asset value method. This is used to take into account the demand for this type of property. For a condominium in a structurally weak small town will have a lower market value than the same residential unit in a large city with high demand.
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