Commercial appraisals can be conducted. In the video, the narrator describes how commercial appraisals are used to determine the commercial value of properties and land. Commercial appraisers are licensed third party professional who will perform the task.

Commercial appraisals are required by banks prior to they issue loans to purchase commercial real property. Commercial appraisers run checks using three different methods, namely the similar approach, the income approach, as well as the cost approach.

The method of comparable involves the appraiser reviewing properties in an area comparable to the one they’re evaluating or has sold in the past six months. They’ll evaluate the appraised property to properties in the area in order to determine its value.

The income method is based on evaluating the properties net income, which means that operating costs are deducted from the gross rent. The net profit is divided with a cap rate which can be utilized to compute a simplified yield for the property.

The cost approach considers the costs of land, construction, and labor in order to assess the worth of a property; this is usually done for newer homes. qo4s38fws3.