Calculating the value of a house?

Hi lads & lassies,
First off, I'm not sure if this is posted in the right forum or not but here goes.

Myself and my wife are currently trying to sell our 4 bed semi with the aim of moving out the country a bit. I was advised by someone that the following formula could be applied to a property in order to arrive at an approximate value of the property.

((Monthly Rental x 12)/52) x 1000 = approximate value of the property.
When this formula is applied to our house it works out as follows,
700(daft asking price for similar house in the area) x 12 = 8400
8400/52 = 161 rent per week.
161 x 1000 = 161,000.
Low and behold the highest offer we have had on our house to date is 160K so I can see how this formula may hold some water.

My problem now is that we are interested in a particular house that is 3 miles outside town. It is a bungalow on 3/4 of an acre and was built in 1980 so it is fairly old. Our plan would be to rennovate it which would mean a further investment of 80K approx on top of the asking price and transaction costs.

In terms of affordability, using the 3.5 times earnings rule we could probably afford 280K approx. However I am having difficulty in putting a value on the bungalow as it stands.

My question is as follows.
Can you realistically apply the formula given above (used on my own house) to a one off rural house? If you can then the afforementioned bungalow is way overvalued. At its current asking price we could probably afford it and the rennovations based on our earnings but I do not want to pay over the odds for anything.

All opinions are welcome.

Thanks in advance.

First the formula you've been given seems to be geared to property investors rather than owner-occupiers and the same property will have different values depending on the type of purchaser.

Second a one-off detached house you describe will be difficult to value and might have almost zero value to an investor but might be very valuable to an owner-occupier / family purchaser. What are similar properties in the area advertised for (as a crude guide)?

Its very hard to try and compare this property to other ones in terms of asking prices for one simple reason. I cannot find any bungalows like this one within a 15 mile radius, i.e 1980's type bungalow. However a similarly sized newly built bungalow would probably retail for about 280K approx.
With this in mind, if my rennovations were to cost 80K should I be looking at paying 200K approx?

There is no method to work out the value of the property in question.

The only way is for you to evaluate how much you would pay for it. In any case, all property is a one-off - there may be similar (even identical) properties nearby, but they are not the same - slighly diferent location, aspect etc.

At the end of the day, they only way to value a property is to feel comfortable with yourself on the amount you would offer and have the vendor with this offer - ie a willing buyer and seller.

Everything else is just a prop to help you get to this stage.