Land Valuation

1
Valuation - agriculture

• Valuation of agricultural units - a brief
  introduction
• Site and dwellings
• Arable land and pasture
• Farm buildings
• Forest
• Forest waste land
• Size influence
• Gravel-pits

2
Valuation - agriculture

• Valuation of an agricultural unit
• Valuation situation?
• Which type of value is relevant?
• Type of agricultural unit?
• Relevant information about the object?
• Valuation method?
• cost/income method (yield method)
• sales comparison method
• direct comparison
• à la carte-method
• Final estimation of the value
• date/time for value
• value
• Documentation- valuation report

3

Valuation - agriculture

• Type of agricultural unit
• Forest-dominated units
• Agro-dominated units
• Vegetable production
• grain
• potatoes
• oil plants, sugarroots
• others
• Animal production
• milk
• beef, pork
• chicken/turkey/ostrich/egg-production
• sheep- and goat-farming
• others
• Small-farms (horse/recreation farms)
• Combined farms/family farms

4
Valuation Theory (4)

• Market value
• The most probable price of a property on the open
  market
• Used in most cases
• Net income value
• The present value of future yearly net income
• Used e.g. for- investment decisions- market
  simulation
• Cost value
• Replacement costs minus depreciation
• Used e.g. for- insurance compensation - market
  simulation

5
Valuation Methods

• Sales comparison approach
• Income capitalisation approach
• Cost approach

When searching for a market value, the income
and cost methods are market simulating methods!
6
Valuation - agriculture

• Methods normally used
• Sales comparison method
• Direct comparing method
• A la carte method
• Cost/income method
• Valuation based on marginal calculation
  principles

7
Valuation - agriculture

• The Sales comparison method means that one have
  to analyse representative purchases of similar
  real properties sold on an open and free market
  to find the market value of the valuation object
  in question.
• For the subsequent analysis the different
  observed prices must be standardized to a
  comparable measure (e g SEK/hectare, Price
  coefficient Price/Assessed value P/T,
  SEK/m3sk etc).
• In Sweden preferably price coefficients are used
  

8
Valuation - agriculture

• Á la carte - method
• Value of site and dwellings is esti- mated by
  comparison with purchase of countryside sites
  and dwellings for permanent living apart from
  farming
• Value of forest is estimated by com- parison
  with purchase of pure forest units
• Value of arable land is estimated by
  comparison with purchase of pure arable land
  units
• Farm buildings is valued with a construction
  cost method often with a fargoing depreciation
  factor

9
Valuation - agriculture

• Valuation factors for arable land
• Productivity, soil quality
• Size, hectares
• Running conditions
• average field area
• field form
• obstacles
• Drainage
• planned drainage
• self draining soils

10
Valuation - agriculture

• Valuation factors for pasture
• Productivity, soil quality
• Size, hectares
• Running conditions
• average field area
• field form
• obstacles

11
Valuation - agriculture

• Valuation factors for forest
• Productivity, m3/hectare and year
• Standing volume, m3 solid volume/hectare
• Type of trees
• percentage needletrees
• pine-wood
• spruce-wood
• percentage broadleaves
• birch-wood
• oak and beech-wood
• other
• Running costs, SEK/ m3
• cutting
• transport
• silviculture

12
Valuation - agriculture

• Valuation factors for farm buildings
• Type of farm building
• stables
• hay-barn
• machine-hall
• farm warehouse
• grain store
• ensilage silo
• greenhouse
• Size
• squaremeter building area (mostly)
• cubicmeter storage volume (silos, grain stores)
• Age
• Standard
• 1 good design for modern farming
• 2 sufficient design for modern farming
• 3 unsufficient design for modern farming