As a key figure for the market value of land and buildings, the price per square metre is required, for example, for the earned value method of valuation or for drawing up a rent index, which in turn forms the basis for any possible rent cap. However, the price per square metre is not calculated using one and the same method for all properties; The variables included in the calculation can vary so greatly that extremely different prices per square metre can be determined even for one and the same property.
Basically, to calculate the price per square metre, the price of a property is divided by its floor area. However, even these two basal factors are not handled in precisely the same way. On the one hand, either the current rent – warm (basic rent plus additional costs such as water, property tax, gas, electricity, and waste disposal services) or cold (basic rent with no additional costs) and scaled to monthly or annually – or the purchase price of a property can be taken as the price. On the other hand, the calculated floor space can also vary. While the price per square metre of a residential building or an individual residential unit is calculated on the basis of the living space, the price per square metre for a plot of land is based solely on its area.
Further complicating the situation is the fact that numerous other aspects can affect the price per square metre. In addition to the standard land value and the location of a property, the year of construction and the energy standard of the buildings erected on a plot of land, for example, will also prove to be of particular relevance as they provide information about the maintenance costs owners can expect in the near future. In order to ensure that the variables used to calculate a price per square metre are in their own best interests, both owner and respective buyers should therefore always check the basis used for calculation.
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