How much is my property really worth? How a valuation works

“What price should I list it at?” This is the first question almost every property owner asks. The usual instinct is to look at listings in the neighborhood. But a listing shows what someone asks, not necessarily what a buyer or tenant pays.

A property valuation aims to establish a value range consistent with the market and your plans.

Valuing a property for sale or for rent

These are two different questions.

For a sale, the aim is to estimate the price at which the property could sell within a reasonable period, given market conditions.
For a rental, the aim is to determine the monthly rent the market will currently support and the associated terms: furnished or unfurnished, fees included or excluded, and lease duration.

The same apartment may be highly attractive as a rental but less appealing for sale, or vice versa. It is therefore best to request a valuation that matches your plans.

The three valuation methods

1. Market comparison. We look for similar properties—location, floor area, age, condition, and parking—that have recently sold or been rented, then adjust for differences. When actual transaction prices are unavailable, listings provide useful indications, but they must be assessed carefully. This is the most common method for apartments and houses.

2. The income approach. For an investment property, rental income helps determine its value. The estimated annual net income is divided by a yield appropriate to the market and the property’s risk.

Illustrative example: a property generating Gs 30,000,000 in annual net income, valued using a 6% yield, would have an estimated value of 30,000,000 ÷ 0.06 = Gs 500,000,000. At a 7% yield, the calculated value would be approximately Gs 428,600,000. A one-percentage-point difference in yield therefore changes the result significantly.

The yield used must be justified: it does not depend solely on the return an individual investor wants.

3. The cost approach. This estimates the land value and the current cost of an equivalent building, allowing for its condition, depreciation, and any outdated or unsuitable features. This method can be useful for certain houses, new buildings, or unusual properties with few comparable examples.

A sound valuation uses methods appropriate to the property and explains its assumptions. When several methods are relevant, their results are compared.

What has the greatest impact on value?

Location, down to the specific street rather than just the neighborhood.
Floor area verified against the property documents, distinguishing private space, common areas, and parking.
The property’s condition and any work required.
Parking, which can strongly influence buyer interest in Asunción.
Legal and administrative status: title, cadastral records, any outstanding taxes or condominium fees, and condominium regulations.
An existing lease, which can benefit an investor but restrict a buyer who wants to move in soon.

Common mistakes

Setting the price too high “to leave room for negotiation.” The property may remain on listing platforms for a long time, lose appeal, and eventually require a price reduction.
Copying the price of a nearby listing without checking whether the properties are genuinely comparable or knowing whether it sold and at what price.
Neglecting the documents. Problems with the title or cadastral records can delay or prevent a sale, even when the price is consistent with the market.

How we work at CALISTA

We provide valuations for both sales and rentals. We visit the property, review the documents, and explain the estimated value and the evidence behind it.

For rentals, the rental assessment is free.
For sales, valuations are priced by quotation, as the fee depends on the type of property.

Would you like to know what your property is worth or how much rent it could generate? Contact us.

This article is for information purposes only. The calculation uses illustrative figures and does not relate to an actual property.

General information: not a substitute for advice from a notary (escribano) or a lawyer.