Fictitious year of construction

In the case of real estate , the remaining useful life (RND) can increase after renovation or a building investment. This can be taken into account by reducing the year of construction on the basis of a calculation in the evaluation procedure. In the tangible asset method , extensions of the RND with increasing useful life have less and less influence on the value, since the ratio of the basic portion to the value of the building increases significantly over time. At the end of the RND, only the basic value remains mathematically.

In contrast to this, the importance of the RND increases considerably in the discounted earnings method , since the multiplier for calculating the present value depends largely on the RND and the capitalization rate. For example, if the RND is extended from 5 years to 10 years as a result of a renovation measure , the income value increases by 100%. Consequently, the exact determination of the fictitious year of construction or the RND after an investment or renovation, especially in the case of the income approach, is of considerable importance.

calculation

Fictional year of construction after Hofstätter

The effects of an investment or renovation of a property on the RND can be calculated using a formula, among other things.
If investments or renovations are carried out at different points in time during the entire period of use , the corresponding formula must be applied in chronological order for each point in time . This is then based on the previously calculated fictitious year of construction and no longer on the original year of construction. ${\displaystyle t_{Inv}}$ ${\displaystyle RND_{t_{Inv}}}$

If the exact investment or renovation costs are not known, the pro rata construction costs for residential and commercial properties can be used according to the construction progress report (property assessment, Heimo Kranewitter, 6th edition, MANZ, 2010).

Formula for calculating the fictitious year of construction according to Hofstätter:

${\displaystyle {\begin{aligned}{\text{1. }}&{\text{Berechnung }}RND{\text{:}}\\&{\text{wenn }}\left({\dfrac {{\dfrac {HK}{GND}}\cdot RND_{t_{Inv}}+K_{Inv}}{\dfrac {HK}{GND}}}\right)>GND;RND=GND;RND\\{\text{2. }}&{\text{Berechnung }}BJ_{fiktiv}\\&(t_{Inv}+RND)-GND=BJ_{fiktiv}\end{aligned}}}$

• ${\displaystyle BJ_{fiktiv}}$ = Fictitious year of construction,
• ${\displaystyle HK}$ = Manufacturing costs,
• ${\displaystyle GND}$ = Total period of use,
• ${\displaystyle RND}$ = Remaining useful life,
• ${\displaystyle RND_{t_{Inv}}}$ = Remaining useful life at the time of investment or renovation,
• ${\displaystyle K_{Inv}}$ = Investment costs or renovation costs,
• ${\displaystyle BJ}$ = Year of construction

Standard model of the AGVGA / NRW

In Appendix III of the real value model for deriving market adjustment factors in North Rhine-Westphalia, points from 0 to 3 are assigned for the implementation of various modernization measures according to a point grid. The sum of the points awarded ranges from 0 (not modernized) to 20 (comprehensively modernized). As a result, the modified RND of the building can be read from the tables.

literature

• Property valuation, Heimo Kranewitter, MANZsche Wien, ISBN 978-3-214-03694-2 - Book XXIV, 378 pages, 6th, edition, 2010

Web links

• Standard models of the AGVGA / NRW

Individual evidence

1. ↑ www.gutachterausschuss.nrw.de ( Memento of the original from February 15, 2010 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.