Commercial & Industrial Property

The Kenton County Property Valuation Administrator (PVA) is responsible for applying a fair and equitable assessment to about 5,000 commercial and industrial properties in Kenton County as of January 1 of each year.  Our office takes great pride in ensuring an accurate assessment is made for each property.

The assessment of your property is based on the market value as of January 1 of each year.  The PVA gathers characteristics about each property, researches local sales as well as market income data, and considers a combination of several appraisal approaches to determine your property assessment.

The PVA relies on professional, well-trained Field Assessors to gather data necessary for accurate property assessments.  In order to assess property at market value, the PVA considers one or more approaches to value: the cost approach, the sales comparison approach, and the income approach.

Cost Approach

The cost approach is based on the principle of substitution:  that a rational, informed purchaser would pay no more for a property than the cost of building a replacement with similar function.  The cost approach seeks to determine the replacement cost new of an improvement, less depreciation, plus land value. Assessors use software cost tables from Marshall and Swift®, the industry leader in building cost guides.  The result of using the cost approach ensures assessments are applied fairly and equitably to all properties.  Even though all properties can be assessed using the cost approach, older properties are more difficult and are more subjective because depreciation for age, functional obsolescence, and economic obsolescence have to be estimated.

Sales Comparison Approach

The sales comparison approach is based on the concept of substitution.  The sales approach to value compares the property value being appraised with similar sales of like properties.  The characteristics of the comparable sales are analyzed for their similarity to those of the subject.  The prices of the comparable sales must be adjusted for any differences between the properties and the subject.  Value indications derived from the sales comparison approach are usually considered particularly significant because they express the reactions of buyers and sellers in the real estate market.  The sales approach is suitable when the same type of property is being exchanged periodically in the market.

Income Approach

The income approach is typically used in appraising income-producing properties. The investor who purchases an income producing property is essentially trading their present dollars for an income stream of future dollars plus the return of their initial investment.  This approach best relies on the "economic value" of real estate with regard to investment decisions and desires for income flow from operation of the property.  The process of converting a series of anticipated income into present value is capitalization.  Capitalization transforms net operating income produced by a property into the property value.