When considering buying, selling or leasing rural property, ideally you would need to have a valuation completed. The best way to do this is with a third party valuer.
Having an independent valuation will help determine the market value of the land and/or market value of the lease. You may use the report to determine if the asking price is suitable or should the price be negotiable.
3 Common Methods for Calculating Value of Rural Property
Direct Comparison: This usually involves a valuer and requires they examine the property on offer and compare it with similar properties in the area. Problems with this method occurs when only a few properties have been sold recently.
Summation: This is similar to direct comparison, but requires that the valuer takes into account the variation between the properties and seek out land similar in class types, enterprise type, water security, infrastructure and proximity to services. Properties are then valued based on a weighted assessment and this is applied to the property being valued.
Productivity/Income: The capitalisation of net income approach involves converting the property's income stream into a capital value estimate through a capitalisation process. Often a difficult method of valuation if reliable financial data isn’t available, the highest and best use is determined and the overall property land capability taking into account sustainable practises, carrying capacity, soil type, income from farming enterprise(s) and utilisation of industry benchmarking.
Why it is Important to get a Valuation
When you have worked the land for many years, you get a feel for what things are and how much income you can expect to receive based on any given number of variables. But, when it comes to explaining this to a person that may not have you experience it can become difficult.
A valuation from a specialist company will give you data for your specific property and this will help secure a quality tenant. And give that tenant a reasonable guide for what the property should return on a varied amount of agricultural industry.
New Technology and how it will impact Rural Property
Secure Impact is a technology platform that will address the efficiency and exchange or farmland and agri assets. It has been developed to connect and help farmers to find farmland opportunities and expand their operations. Often the relatively older farmer owners behind the curve on technology and view it too difficult to adopt due to their viewed short time proximity to retirement. By offering them an easy to use online platform they can use themselves or a trusted agent will help assist making their property offering known to young farmers, expanding farmers, which are already avid users of technology. Leading to this tech savvy generation embracing the Secure Impact online platform for finding farms to buy, lease or sharefarm.
Why it is Important to get a good understanding of Market Value of Rural Property
Understanding the fair market value for their farmland is a crucial step in the financial viability of a farming operation and the platform uses technology to aid the decision of market value of property. In development is an Agriculture Index, index focus on sustainability, capital & production and risk– accounting for land capability, soil type, rainfall, location, market segment, enterprise and sustainability and using spatial mapping imagery to understand market value of rural property. The uptake of this technology will help farmers make the best financial, insurance and acquisition decision. Future tools for valuation assessment of rural property is use of AI (Artificial Intelligence) and AR (Augmented Reality) which will have dramatic impact and driver of rural property values in agriculture.
Our Secure Impact Marketplace Platform delivers trust, transparency and real time transactions. We are passionate about the needs of our stakeholders, creating long-term industry change and real growth of the rural industry.
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