Report on valuation of Residential Property (Flat)

1. Introduction
This valuation report is prepared as a part of project work (4th semester)
leading to the degree of M.Sc. in Real Estate Valuation to be awarded by
Sardar Patel University, VVnagar.

2. Purpose of Valuation
To estimate Fair Market Value for buying purpose.

3. Date of Valuation
The property was inspected on 15th December, 2018

The valuation is carried out as on 20th December, 2018

4. Details of Title and Tenure

The property is jointly owned by Mr Dakshesh Becharlal Raval and Smt. Hetal
Dakshesh Raval. (Ref Annexure 2 & 6)

The property is let out on licence to Shri Manoj Mohan Joshi. (As per the Leave
and License agreement, Ref Annexure 4)

5. Brief Description of the property

It is a residential flat in satellite area of Ahmedabad. It is having built up area of
106.18sqmt and the building is RCC frame structure with 5 floors in one block
and each floor having 4 flats respectively.(Ref Annexures 3 and 8)

5.1 Situation and location of property

The subject property is situated at flat No. C/103, 1st floor, Sharnam-3, near
Hetvee Towers, Shyamal cross roads, Satellite, Ahmedabad: 15 bearing F.P. no
40/1, T.P Scheme no. 3, survey no 34/1/1 part, mouje vejalpur. (Ref Annexure
5 & 7)

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5.2 Identification of Property
North: D block

South: Flat No. C/104

East: Shivalik Apartments

West: Flat No. C/102

6. Detailed description of property

6.1 Location Aspects:

The residential flat is located in a fully developed area of satellite,
Ahmedabad: 15. All the basic amenities are available in the society and basic
civic facilities like hospitals, educational institution, banks, are available in the
nearby area. Transportation facilities like AMTS, auto, cab etc. are easily
available.

6.2 Amenities and Infrastructure:

All amenities like Petrol pump, restaurant, shopping mall, garden, post office,
internet and courier services etc. are available within radius of 2km.

6.3 Physical Aspects:

It is a residential flat admeasuring 106.18sqmt built up area and is situated on
1st floor of block C of Sharnam-3 society ( Ref Annexure 1)

6.4 Legal Aspects:

It is a licenced property. It is free from any encumbrances like easement right,
govt. restrictions and court litigation (subject to title clearance certificate from
independent lawyer).

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6.5 Environmental Aspects:
The Aforesaid society and the subject property are located in the interior of
by- lane where no/little noise pollution is there and good ventilation along
with clean air is easily assessable.

6.6 Economic Aspects:

Subject property is situated in an area where demand of such 2bhk flat for rent
is very high and supply is little scarce. The area is a middle class area and
densely populated one.

6.7 Engineering Aspects:

The built up area of subject property is 106.18sqmt and it is RCC frame
structured with ceramic flooring in all rooms and granite top platform in
kitchen and wooden door with aluminium fittings. It is a 2 bedroom, 1 hall, 1
kitchen and 1 storeroom and 2 bathrooms flat.

6.8 Architectural Aspects:

The society is designed and constructed as per modern style and each flat is
having 1 personal parking space (which is to be bought). All facilities like
electricity, water supply and drainage are available and CCTV cameras are also
installed with 24*7 security and lift available for all blocks.

6.9 Age and Estimated life of building

It was constructed in year 1999-2000 and current age is 18 years with
estimated total life 80 years and balance useful life of 62 years. (Ref Annexure
5)

7 Basic methodology for valuation

Market Value of subject property has been estimated by Rental Method under
Income Approach to valuation. This method is suitable for the properties which
are held for investment and gives reasonable returns. Mathematically this
approach can be stated as:

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 Capital value of a property = net annual income from property / Years
Purchase.

Rental method has three stages. First stage consists of working out fair and
maintainable rent receivable from property. Second is to work out all the
outings required to be incurred by the landlord to maintain the property. Third
is to capitalise the net income at most appropriate rate of capitalisation to get
the final value of the property.

All the data regarding subject property and instances are collected by local
market inquiry and personal interview of real estate brokers. Site Inspection of
the subject property was carried out and all necessary documents were
collected.

8 Sale Instances for reference in calculation of yield rates:

Sale Instance 1: The property is located at Sharnam 2 Society in Satellite

area which is located on first floor. It is located within 2-3 Km radius from
Subject property. It has good Modern Furniture and Fixtures and is of 123
Sqmt Built-up Area. Gross annual rent is Rs 200000/- Per Annum and taxes are
worth Rs 8000/- per Annum so net Annual Rent comes to Rs 192000/- only.
The property was sold in January, 2018 and was sold at 66 lakhs only. (For
Location Ref Annexure 9)

Sale Instance 2: The Property is located at Rahul Towers near Titanium City
Centre which is located on second floor. It is located within 2-3 Km radius from
the subject property. It has average interior and furniture and other fixtures
are relatively in good condition. Property has built-up area of 102 Sqmt. Gross
annual rent is worth Rs 226000/- per annum and taxes and miscellaneous
expenses turn out to be Rs 10000/- per annum So net rent is Rs 216000/- per
annum. It was sold in year March, 2018 for 65 lakhs. (For Location Ref
Annexure 9)

Sale Instance 3: The Property is located at Indraprasth-4 Society near

Prahlad Nagar road on 5th floor having built-up area of 106 Sqmt and is located
within 2-4 Km radius from subject property. It has average interior and good
condition of furniture and fixtures. It has gross annual rent of Rs 214000/- per
annum and outings worth Rs 10000/- per annum so Net annual rent worth Rs
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204000/- per annum. It was sold in December, 2017 for 57 lakhs. (For Location
Ref Annexure 9)

Sale Instance 4: The Property is Located at Susmit Apartments near judges

bungalows and is located within 3-5 km Radius from subject property having
built-up area of 126.5 Sqmt. It was sold in year September, 2017 for 68 lakhs.
Gross rent is Rs 206000/- and outings worth Rs 8000/- per annum so net rent
turns Rs 198000/- per annum. (For Location Ref Annexure 9)

Sale Instance 5: The Property is located at Shalin Otium near Corporate

Prahlad Nagar road and is within 2-4 km radius from subject property. It has
built-up area of 128 Sqmt and was sold in year August, 2018 for around Rs 71
Lakh and has gross rent worth Rs 250000/- per annum and taxes turn out to be
Rs 16000/- so net Annual rent is Rs 234000/-. The property is in good
condition. (For Location Ref Annexure 9)

Sr. Address Floor Area in Sale Net Yield rate (net rent/sale
No. Sqmt price annual price) in %
( RS ) rent ( RS )
1 Sharnam 1 123 66lakh 192000 192000/6600000=3.00%
2,Satellite
2 Rahul Tower 2 102 65lakh 216000 216000/6500000=3.332%
near Titanium
City centre
Satellite
3 Indraprasth 4, 5 106 57lakh 204000 204000/5700000=3.578
Prahlad Nagar
Road
4 Susmit 2 126.5 68lakh 198000 198000/6800000=2.91%
Apartments
near Judges
bunglow
5 Shalin Otium 7 128 71lakh 234000 234000/7100000=3.29%
near Corporate
Prahladnagar
road Satellite

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Based on above studies, the average yield rate assumed for valuation
is 3.5%.

Rent of subject property is Rs 20000/per month as per leave and

licence agreement (Ref Annexure-4). So gross annual rent is Rs
240000/-

Outings includes property tax worth Rs 2500/- p.a and maintenance

worth Rs 20000/p.a

So net Rent is Rs 217500/p.a

Now,

Years purchase = 100/3.5 =28.57

Capital value= 217500*28.57 = Rs. 6213975/-

Say, Rupees sixty two lakhs only. (Rs 6200000/-)

9. Conclusion

The present fair market value of flat no C/103, 1st floor, Sharnam 3,
near Hetvee Towers, Shyamal cross roads, Satellite, Ahmedabad:
15 bearing F.P. no 40/1, T.P Scheme no. 3, survey no 34/1/1 part,
mouje vejalpur for Buying Purpose is Rs6200000/- (Rupees Sixty
Two Lakh Only) after considering all the assumptions and special
assumptions.

10. Observations, Assumptions and Limiting conditions

1. For the purpose of this valuation exercise, I have assumed that the
subject property has a clear and marketable title and is free from any
legal and physical encumbrances, disputes, claims and other
statutory liabilities. Further, I have assumed that the subject

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property has received requisite planning approvals and clearances
from appropriate local authorities and complies with local
development control regulations.

2. The subject valuation exercise is based on prevailing market

dynamics as on the date of the valuation and does not take into
account any unforeseeable developments which could impact the
same in the future.

3. All physical measurements and areas are approximate in nature.

The actual age is based on information made available to me at the
time of inspection. The remaining economic life is approximate in
nature, and is based on my judgment.
4. No soil analysis or geological or other technical studies were made
in conjunction with the report, nor was any water, oil, gas or other
subsurface mineral and use rights or conditions investigated.
5. For the purpose of this valuation exercise, I have assumed that the
subject property is free from all the litigation, encumbrances,
encroachments etc. and all the taxes related to the subject property
have been paid in time.
10. Declaration

I hereby declare that the information contained in this report is true

and correct to the best of my knowledge and belief. I have no direct
or indirect interest in the property valued. The property is inspected
by me and all the details are as per the documents submitted and
there are no material divergence from the documents and also I have
used fair and realistic local market rates of rental instances as well as
sale instances. This report is solely for the use of buyer to assess the

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fair market value for buying purpose. No part of this report shall be
copied without prior permission of the author.

11. List of Annexures

1. Property Photos

2. Property allotment letter and 7/12 abstract

3. Development agreement

4. Leave and licence agreement

5. Property tax receipt

6. Share Certificate

7. Light Bill

8. Approved plan copy

9. Google Map showing location of subject property and sale instances

Place: Ahmedabad Signature & stamp of registered valuer

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 1 Property Photos

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 2 Property Allotment letter and 7/12 Abstact

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 3 Development Aggrement

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 4 LEAVE AND LICENSE AGREEMENT

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 5 Property tax Receipt

103
 6 Share Certificate

104
 7 Light Bill

105
 8 Approved Plan

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 9 Google map Showing subject property and sale
instances

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