How to Appraised Road right of way affected by NGCP at Valencia Bukidnon

 

Road right of way appraisal is very challenging , valuation report should provide credible reasoning and solutions to convince the court . One factor that gives the appraiser  a lot of headache is when the client only provides technical site description yet there is no sketch plan for the road right of way affected area.

Identify first what type of kv line that affected the property , it looks like this :

In my case , the item installed is a subtransmission line with 69 kv line , then it is very easy for us to identify the easement zone that will affect the property , for 69 kv voltage level , the standard width (m) for both sides is 15 meters. thus the length of the adjacent property is 1,000 meters or 1 km , we then multiply from the desired width of 15 meters to obtained the easement area of 15,000 sqm more or less. 

For the approaches to value , there is a scarce of sales data within the area , thats why sales comparison approach is not a reliable indicator to value. Cost approach is not also applicable , there may be an agricultural improvement but there is no improvement affected by the road right of way easement. It is best to apply income approach for the area , why? because I observed that the area is cultivated with banana typically cavendish with irrigation system. I called back the client and requested for the potential gross income per hectare of banana land and their operating expenses , the we subtract the potential gross income to the operating expense to arrive at the Net Operating Income after tax . Capitalization rate will be easily extracted from band of investments from banks , mortgage to loan ratio , in my computation , the cap rate around the area is around 12%. Thus to obtain the  market value using the formula , V = I/R , Market value = Net operating income after tax /  Capitalization rate . Appraisal solved !!!