Obtaining an accurate valuation of a property is important for a number of reasons, including; obtaining finance, as an analysis for investment, for taxation purposes, and for building insurance.

There are two key ways in which to determine the value of your business property. The first is the replacement cost, which refers to how much it would cost to replace equipment, furnishings, and the actual buildings themselves, should they be damaged or destroyed by flooding, fire, or other cause. The second is the actual cash value, or what is the replacement cost of your property, minus accumulated depreciation for wear and tear.

When establishing the value of their property for insurance purposes, many are inclined to insure it at the current market value. However, insuring for the replacement value might be the wiser option. Although market values have generally dropped, replacement costs have, like most things, continued to rise.

It’s important to remember that while your premiums may be lower if you insure for current cash, or market, value, any savings you may realise from these lower premiums could easily and quickly be wiped out in the event of major property damage, and the ensuing expensive rebuild needed to restore your property to its original state.

Either way, obtaining an accurate valuation of your property will give you a much better idea of how much you want to insure it for.

Unlike items insured for short-term periods, such as cars, cell phones and personal items, property values are realised over a long period of time, so an accurate calculation of its value must take such factors as social and economic trends, environmental conditions, and relevant government controls into account.

At The Property Partnership East Rand, we provide free, no-obligation quotations for comprehensive, accurate valuations on commercial and industrial property, as well as plant and machinery. Contact us today.