property valuation questions - Essay Example

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property valuation questions

Here discounted cash flow method is used in this type of property valuation methods.
The Residual Method: This method is used to value existing properties that has a potential to redevelop. This method of property valuation consists of many variables and these variables are very sensitive to any changes in market conditions.
The Profits Method: This method is also known as account method. It is used where a commercial property is used for accommodation as an integral part of its business. It is generally used in trading premises but also restricted to the property that changes hand on freehold basis.
The cost Approach: This method of property valuation for a property that is acquired by its owner but lacks in comparable evidence for similar property transactions. It works on the assumption that the property valued forms part of an ongoing business asset.
5. The comparative method: When comparable transaction of a property is done against a property with similar characteristic. This method of property valuation is called the comparative method of valuation. Generally valuation of agricultural land is mostly valued using this valuation method where the value of the agricultural land is derived from the similar land sold earlier. This method is also in use in UK as an informative source. ...Show more

Summary

(a) The comparative method: When comparable transaction of a property is done against a property with similar characteristic. This method of property valuation is called the comparative method of valuation. Generally valuation of agricultural land is mostly valued using this valuation method where the value of the agricultural land is derived from the similar land sold earlier…
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