In general, three different methods can be identified by banks to determine the lending value for real estate. Depending on the situation and location, the methods are changed among themselves.

• the physical value procedure
• the earned-value method
• the comparative value method

Normally, none of the methods is used as the sole method. As a rule, the tangible value is considered together with the yield value: the tangible value method usually comes into play when the buyer uses the property himself. This method is used to determine what the property would cost if it were newly built. In this case, the land value, the building value and the land value represent the loan value. In the case of old buildings, impairments are deducted from recent years. The value can be retold very well here, but without taking into account current developments. If real estate is rented out or used commercially, the yield value method is used. In this case, the land value and the expected rental income in the future represent the loan value. So if you want to use a property to make an investment and finally rent it out, you will have to determine the yield value. Residential properties such as condominiums or single-family homes are calculated using the comparative value method. Current market values play a decisive role here. The regional conditions in terms of land prices or the location are important factors for this. Thus, the actual value of the property is shown here. However, there is a disadvantage when the market situations in the given area fluctuate greatly. Also, for a clear comparison, comparable objects must be found.