Valuation and Investment (Calculations) Flashcards on Bits of Valuation Theory, created by amywinzer9 on 07/25/2013.
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Created by amywinzer9
over 10 years ago
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Name some differences between the property market and other investment markets...
What are some merits of the property market for investing in?
What causes change in rental value?
What can cause changes in yields?
what can cause changes in land value?
Name 6 reasons why we have valuations:
Name some necessary things for the comparative method of valuation...
Name the five investment methods:
What will the 'amount of £1' end up as?
What will the 'PV (Present Value) of £1 end up as?
Investment Method: Traditional Approach!
Rent: £245,000.
All risks yield: 7%
How do you do the valuation?
Investment method: Term and Reversion.
Property just let @ £245,000pa on FRI terms for 25 years.
Market rent nearby is £255,000 on similar terms. A similar property has been sold nearby at a yield of 7%.
How would you do a valuation?
Name the two criticisms for the traditional approach of the investment method:
Why is the DCF approach of the investment method better?
How do you get an exit value for the end of a DCF valuation?
What are the 6 headings in the DCF table?
When looking up the PV for a DCF table what amount of years should you use?
For example if the time period is 6-10 years.
How do you do an IRR valuation?
What effect should different yields have when doing DCF/IRR?
Do leaseholds or freeholds have higher yields and why?
If no exact sinking fund and tax rate are given what figures should you use?
How do you value a head leasehold?
