How to bank on a safe exit
Crossley-Smith, T.
How to bank on a safe exit - 2001 - Estates Gazette (0121) 26 May 2001, 156-157(2) .
Examines the difficulties involved in conducting residual valuations and argues that a standard approach is required; residual value lacks a definition in the Red Book and agreement among valuers on methodology. Looks at the three different approaches used to calculate residual value and the issues raised, such as the concept of depreciation. Proposes a basic definition of residual value as the market value or open market value of the property in x number of years time (the length of the proposed loan), and advises valuers to give a range of values rather than a single figure. Also considers the problems involved in forecasting rents and yields, the potential inaccuracy of economic forecasts, the effects of inflation, and the importance of warning clients of the risks of prediction.
RESIDUAL VALUATION
INFLATION
FORECASTS
RENTAL VALUES
PROPERTY MARKET
RESIDUAL VALUE
DEPRECIATION
How to bank on a safe exit - 2001 - Estates Gazette (0121) 26 May 2001, 156-157(2) .
Examines the difficulties involved in conducting residual valuations and argues that a standard approach is required; residual value lacks a definition in the Red Book and agreement among valuers on methodology. Looks at the three different approaches used to calculate residual value and the issues raised, such as the concept of depreciation. Proposes a basic definition of residual value as the market value or open market value of the property in x number of years time (the length of the proposed loan), and advises valuers to give a range of values rather than a single figure. Also considers the problems involved in forecasting rents and yields, the potential inaccuracy of economic forecasts, the effects of inflation, and the importance of warning clients of the risks of prediction.
RESIDUAL VALUATION
INFLATION
FORECASTS
RENTAL VALUES
PROPERTY MARKET
RESIDUAL VALUE
DEPRECIATION