Valuation of Agriculture

Based on the first article, why did the comparison method are more suitable to use compared to profit method?

• the income method requires a lot of research and focus on the factors related to it for reflect

• require more time concentration when direct exposure to the landlord involved

• suitable for special properties where direct sales evidence is not important

• exposure to real market condition

2. What is the alternative method to value the agriculture land, how is the step to do valuation?

• Comparison method. The valuation is done by comparing the agricultural land with nearby residential properties that have recently been sold. Factors such as the number of bedrooms, built-up area, and renovation quality are taken into account. After making necessary adjustments, the average price per square foot is applied to estimate the land value.

• Profit Method. The research focuses on the net revenue obtained from the paddy land each year after deducting the expenses or costs involved. The net income received will be capitalized with a certain rate of return to obtain the market price of the land

• Invesment Method. The agricultural land is valued based on rental income from shop lots built on it. The annual rent is calculated and then capitalized at a market rate to estimate the land value. This method reflects the potential investment return for commercial properties.

• Cost Method. The value of the land is determined by calculating the cost to build farming facilities, such as barns or irrigation systems. Depreciation is deducted, and then the construction cost is added to the land acquisition cost from city land sales.

3. What is the adjustment that valuer usually will do when adjusting the comparable values before arriving at the market value?

• Valuers will adjust the land value by using only the average price of all nearby lands without considering specific differences in location, size, or accessibility

• Valuers will only compare the subject land to the most expensive land in the area to get the best possible value for the client

• Valuers will make adjustments based on government-stated land values only, without referring to recent market transactions or actual sales evidence

• Valuers will list out the similarities and differences between the subject land and the other comparable or similar land

4. Based on the second article, Why It is advisable to obtain a map of the locality?

• It is because can enable the location of the property in relation to the various facilities described can be seen at a glance. It enhances the usefulness of a Valuation Report if a location plan is included as it also enables easier identification of the property covered by such report

• It is because a locality map allows the valuer to estimate the property value by simply measuring the distance from the nearest main road or city, without the need to analyze other factors

• It is because including a locality map helps the valuer propose new development ideas or planning changes to increase the land’s potential before reporting its value

• It is because the only purpose of a locality map is to show the land size and boundary clearly, and it does not need to include nearby facilities or surrounding context

5. According to National Land Code, state all classes of agriculture holdings in West Malaysia.

• Agricultural lands are classified into commercial agriculture, subsistence agriculture, and mixed farming

• Agricultural holdings in West Malaysia can be classed into plantations, farms, and orchards

• Agricultural holdings in West Malaysia can be classed into estates, smallholdings and padi lands (or 'Bendang')

• Agricultural holdings in West Malaysia can be divided into state land, freehold land, and reserve land