Vluin Rr of w Uni in n Lnd - Report Example

VАLUАТIОN RЕРОRТ ОF ТWО UNIТЕ IN ОNЕ LАND Name Institution Name Date Introduction The citadel intent of this valuation report is to offer a precise appraisal on the present market value of developing duplex house located at Lot 110, #103 Gorman Street Darling Heights 4350. Comparable sales method will be used in determining the market value of the duplex. Valuation report Valuation Market value has been used in this appraisal report. According to Musial & Munizzo (2010, p.6), market value concept has been utilized for many years and many people have interpreted it differently. For instance, when one is completing a task for any objective governed by federal or state law, an appraiser is supposed to use definition of the market value which is identified by jurisdiction that the market value appraisal is being undertaken. Market value is not supposed to be confused with listing price or asking price which is the price that one would like to sell and first advertised price. Additionally, market value should not be confused with offering price that is the price that one buying offers when he is paying for the property (Tracy, 2013, p.311). According to Floyd & Allen (2002, p. 225), market value refers to kind of value in which real estate appraisers attempt to give a rough estimate. According to Uniform Standards of Professional Appraisal Practice, the most accepted explanation of market value is the most likely price that a property will have in competitive as well as open market according to all the conditions required for fair sale, the seller and the buyer acting knowledgeably and prudently as well as assuming that undue stimulus does not affect the market price. Date of inspection and valuation 2nd September 2013 Client Diamond Building and Construction Property Address 103 Gorman Street, Darling Heights QLD, Toowomba 4350 Real Property Description Lot 110 on RP838422 Area 672m2 Tenure Freehold tenure – no encumbrances or restrictions on the land Local Authority Toowoomba Regional Council Zoning Mixed housing – single dwellings suitable for residential housing and higher density accommodation. There are also various commercial activities taking place around the proposed project site, for instance, RMA Hair and Beauty Salon. Google earth image showing areas adjacent to the proposed project site Statutory Valuation $150,000 at 2/9/2013 Highest and Best Use The land is not developed and is suitable for residential property Location The proposed site is on latitude 27035’50.35’’S and longitude 151055’25.11’’E. The land that is supposed to be developed is on along the quiet Gorman Street of the Baker Street and its about 300 meters west of RMA Hair and Beauty Salon. The proposed project area is highly populated since it has many residential houses owing to its proximity with University of Southern Queensland Campus. Toowoomba city is at the heart of Darling Downs area and it is located about 120 kilometers west of Brisbane state capital. Currently, the city has a population of about 100,000 and experiences an enjoyable atmosphere as well as ample levels of rainfall making and the area is common residential place for retirees. This can be attributed to the quiet nature of the area. Access The lot can be accessed through Gorman or Baker Streets both have a two-lane bitumen carriageway and has a kerb as well as channeling which is good condition. Services There are various services and utilities available to it its residents Sewerage - Toowoomba Regional Council Water – Cressbrook Dam was constructed in 1983 and it began supplying water to the city in 1988. The dam has a capacity of approximately 80,000 megalitres. The city has three dams namely; Perseverance, Cressbrook and Cooby. Also, the city has fractured basalt of Main Range Volcanics. Toowoomba City Council started bore drilling project to augment the declining supplies as well as constructed various sub artesian bores in Toowoomba and a Cartesian bore at Wetalla in north of Toowoomba. Most sub artesian bores give portable water that has a reliable yield. Electricity – Kearneys Springs Power Grid Gas Public transport – Qconnect Bus lines. The area is served by Bus Queensland. There are many bus services that connect Toowoomba to other cities. Toowoomba has been included in the TransLink. The city has a rail service that operates twice a week and serves between Brisbane to Queensland, Charleville and then it returns on QR’s Westlander. The city has many railway line sthta are not mostly not being used or being used for freight as well as idle railway stations can be located in suburbs. The city has an airport, Brisbane West Wellcamp Airport, which is still under construction. Refuse collection – Toowoomba Regional Council Waste Collection Telecommunication Amenities There are four recreational parks that have playgrounds as well as BBQ facilities. There are various schools, for instance, primary as well as public schools that are adjacent to the proposed project area. For instance, Darling Heights State Primary School which is located along Platz St, and its about 20 minutes walking distance. Some of the public primary schools in the area include Glenvale State School, Harlaxton State School, Middle Ridge State School, Toowoomba North State School, Toowoomba East State School, Wyreema State School and Wilsonton State School among others. Some of the private primary schools in the city include Toowoomba Preparatory School, Toowoomba Christian College, St. Thoman More’s School, Sacred Heart School, Mater Dei, Christian Outreach College Toowoomba, Darling Downs Christian School and Grammar Junior among others. Some of the public secondary schools in the area include Centenary Heights State High School, Harristown State High School, Clifford Park Special School, Toowoomba State High School as well as Toowoomba Flexi School. Some of the private and religious secondary schools in the region include Concordia College, Christian Outreach College Christian co-educational school, Toowoomba Christian College, Toowoomba Grammar School, St. Mary’s College and St. Joseph’s College among others. There are also various child minding facilities, for instance, Country Garden Childcare Centre which is on Drayton Road Harristown, about 3.6 kilometers. University of Southern Queensland is about 600 metres from the proposed site along Baker Street. Griffith University also has training facility in the city. University of Queensland has its existence in Toowoomba. TAFE Queensland has campuses towards the east of the CBD. There are various fast food stores, hotels, beauty salons, shopping centres as well as petrol stations which are adjacent to the proposed project site, for instance, RMA Hair & Beauty Salon which is about 300 metres from the proposed project site. Toowoomba Plaza is the main closet hub which is about 3 kilometers away and has hotels, petrol stations, fast food stores, beauty salons as well as shopping centres. There is also a shopping village which is located close to Drayton Road. In Toowoomba Rugby league is a common sporting activity. Toowoomba has Toowoomba Raiders FC that plays Brisbane Premier League Division 1. Garden City Raiders is its junior soccer club. The city also has various clubs for different sporting activities such as swimming, cricket, archery, baseball, tennis, netball, hockey, gridiron as well as basketball. Some of these sports have formed associations such as Toowoomba Hockey Association, Toowoomba Baketball Association and Toowoomba Netball Association among others. REGIONAL DATA According to regional data provided by Toowoomba City Council for 2006/2007 period indicates that the city has flourished continuously in various aspects such as economically, in terms of investments, and employment. Some of the information available about Toowoomba City includes: According to Toowoomba Council the city had a population of about 151,276 The city is the commercial and economic epicenter of Darling Downs Region and in QLD the city has the seventh largest council. Some of its rural towns include Millmerran, Crows Nest, Cambooya and Clifton (Doneley, 2012). The city’s Gross Regional Product increased by about 6.2%, gas, electricity, as well as water experienced highest annual increase in the Gross Regional Product that increased by about 30.2% (Doneley, 2012). According to the Australian Business Register there are about 13,156 registered businesses within Toowoomba with fishing, forestry and agriculture being the biggest in the sector. Unemployment levels are very low in Toowoomba. Unemployment levels are below Australian and Queensland averages. Employment levels in the city stand at 77,196 and this increased by 5.0% from the previous year (Doneley, 2012). Rent rates in Toowoomba are very low compared to what is paid Brisbane. There are various key business profiles in Toowoomba region. Some of these key business profiles include Wagner Group, Heritage Building Society, Easternwell Group, Pacific Seeds as well as Russell Mineral Equipment and many other recognizable companies. Averagely housing prices in Toowoomba region range from about $175,000 in Clifton to about $357,000 in Crowns Nest and 30.5% Jondaryan had the highest increase in prices of property (Doneley, 2012). University of Southern Queensland is a national university and it even draws students from abroad. The huge population in the city can be attributed to the high student population in the city. Areas that surround the university have developed both residentially and commercially (Doneley, 2012). Site description/ Topography The proposed project site is located along both Baker and Gorman Street. On one side along Gorman Street there are trees and vegetation. Adjoining land along Gorman Street The proposed project site As can be seen from the above photos the proposed site is fallow land and has red soil which hold star grass. There are various species of trees that can be spotted in the vicinity of the proposed project site. The trees help in providing a cool climate. The proposed project site slopes from South East to North West. The area has some hills and valleys that can be spotted from the attached pictures. Vegetation adjacent to the project site Observation The land slopes from South East to North West. The land is fallow and is only occupied by star grass. The piece of land is wide and can hold about two town houses with adequate space for parking and a playground. The site touches both Gorman and Baker streets which will be instrumental in providing good access to the site and this makes the land very suitable for various activities. Both Gorman and Baker streets are tarmacked (USQ, 2013a). Comments on the property The proposed project site is located in a very quiet and well developed surrounding in Darling Heights. Typically, the town house will be meant for families owing to its size. The two houses will be well-presented and it will have zero major maintenance issues. Some of the major costs upon completing the house will be electricity and water bills and will be paid by the occupant of the house. Both electricity and water bills will be negligible. In case there will be any major maintenance issue it will be done once in a blue moon and there will be minimal maintenance costs since the house will be constructed with durable materials. The exterior and interior of the house will be in a very good condition and demand for this type of house and surrounding environment is in very high demand. The town house will have reasonable number of bedrooms, air-conditioning and bathrooms. The expected marketability of the property is likely to be very high since it situated in well-developed suburb Toowoomba. Its proximity to shopping centres and university makes it suitable for accommodation of University of Southern Queensland. Sales evidence/ schedule of sales Address Date Price Comments Comparable Sale 1 4 Dalzell Cresent 29/11/2012 $270,000 600m2, regular Comparable Sale 2 6 Jade Close 27/01/2013 $315,000 Shaped lot 600m2, irregular Comparable sale 3 12 Krog Court 06/01/2013 $292,500 Shaped lot 600m2, regular shaped lot Valuation The valuation is founded on a vacant possession basis. Full analysis of sales Recently, Darling Heights has become popular therefore there is an increased sell of property in the area. Three comparable sales within vicinity of the valued property was collated for comparison purposes. The collated residential properties collected are in the same neighbourhood street to valued property and the present similar features, for instance, land, date sold and living size area. The similarity of data collected is a reliable information source. RECONCILIATION Apparently, the person who is likely to get most profit from the purchase of land to develop the town houses is likely to be a family which is seeking a quiet place located in suburban area which is adjacent to amenities and schools or a group of university students who are searching a house to share a house that is a walking distance from the university. Entrepreneurs can take chance of this so that they can purchase the land and buy the piece of land so that they can develop it and provide accommodation to university students (USQ, 2013a). There are some differences between subject property and comparison properties that should be considered so that the valuation can be accurate. Some of the assumptions made relate to qualification of particular dissimilar aspects as well as decision making process of the buyer. All comparable property have been judged to determine likely market value. Adjustment grids for key aspects have been generated for all the possible comparison between comparable sales (USQ, 2013b). Checking using summation method Using three comparable sales, sale price for property is between $325,000 and $335,000, and a likely sale value of $400,000. The checked property value using summation method is $365,386.80 that justifies the property value. Dwelling Units Unit Price Cost Living area: 97 $1000 $97,000 Entrance area: 1 $400 $400 Garage: 12 $650 $7800 $105,200 Ancilaries Shed 4 $9 $36 Driveway 18 $27 $486 Entertainment area 15 $500 $7,500 $8,022 $113,222 Less Depression at -12.00% 15 years at -1,358.64 $111,863.36 Turf/ landscaping 315 $10 $3150 Land 672 $250 $168,000 $171,150 $283,013.36 Structural engineer fee $700 Drafter fee $650 Surveyor fee $500 $1850 $284,863.36 Material costs $50,000 Labour $27,000 Taxes and other levies $4,000 $81,000 $365,863.36 Summary The market value of the property to be developed at Gorman Street Darling Heights in the present market value is $365,863.36 the market value was determined by comparing sales method and it is proven through summation methodology. There is zero maintenance cost associated with the property. The property is to be located in a prime area since it is adjacent to various facilities and institutions such as University of Southern Queensland. The proposed project borders Gorman Street and this makes it easy to access the site. University of Southern Queensland is also along Baker Street and the property is to be developed along Baker Street this makes it easier to access the site just in case University of Southern Queensland students occupy the property. This implies that a developer can take advantage of the proximity to University of Southern Queensland since the institution experiences accommodation crisis. A developer is also likely to benefit more if the facility is used to accommodate students since he can charge them more amount of money as rental fee since several students are likely to share the same duplex unlike when the duplex accommodates only two tenants. The cost of land in the area is also increasing with time since the value of land has doubled since the last five years and speculations are rife that its value will grow at an astronomical value over the next ten years owing to a multiplicity of factors evident in the area. Firstly, the area is very quiet and secure. Secondly, there various shopping centers in the region and the climate is also very cool. According to the google earth imagery of the site it shows that the area is well developed and there is no other vacant piece of land which is adjacent to the proposed project site therefore this could be a good opportunity for a developer to grab this opportunity and develop the area. Description Subject Sales Comparable 1 2 3 Sale price $270,000 $315,000 $292,500 Sale date Present 29/10/12 27/2/13 06/01/13 House age years 0 15 15 15 Bedrooms 2 2 2 2 Bathrooms 1 1 1 1 Entertainment area sq.m. 25 18 28 18 Living area sq. m 135 145 130 120 Land area sq.m 670 580 550 550 landscaping Yes No yes Yes Driveway Yes yes yes Yes Air conditioning Yes No No No Repairs None None Average None Rain water Yes Yes No Yes Fencing Partly partly partly Partly Garden Shed sq.m 10 10 10 10 Garage size SLUG DLUG DLUG SLUG References Donley, B 2012, Toowoomba to Torokina: The 25th Battalion in peace and war, 1918-45, Big Sky Publishing, Newport. Flyod, C & Allen, M 2002, Real Estate Principles, Dearborn Real Estate Education, Chicago. Musial, L & Munizzo, M 2010, General sales comparison approach, Cengage Learning, Cengage Learning. Tracy, J 2013, Accounting for dummies, John Wiley & Sons, Hoboken. University of Southern Queensland 2013, Land administration introductory book. Toowoomba: University of Southern Queensland. University of Souther Queensland 2013, Land administration study book. Toowoomba: University of Southern Queensland. Read More