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Valuation of varying profit rents

By: Contributor(s): Language: English Series: Journal of Property Valuation and Investment ; 9(1) Autumn 1990; 9(2) Winter 1990/91, 137-144(20)Publication details: 9(1) Autumn 1990; 9(2) Winter 1990/91, 137-144(20)Subject(s): Summary: The valuation of variable profit rents in leasehold interests is an area which has caused significant problems for the valuation profession. Use of traditional dual rate valuations results in a mathematical error within the valuation and an under-valuation of the interest. Various attempts have been made to overcome this error and this paper analyses and appraises each method in turn before concluding which method should be adopted. Part 1 carries out a comparative study of the four main methodologies and part 2 analyses the problem of negative contributions to the sinking fund . References. (Journal abstract)

The valuation of variable profit rents in leasehold interests is an area which has caused significant problems for the valuation profession. Use of traditional dual rate valuations results in a mathematical error within the valuation and an under-valuation of the interest. Various attempts have been made to overcome this error and this paper analyses and appraises each method in turn before concluding which method should be adopted. Part 1 carries out a comparative study of the four main methodologies and part 2 analyses the problem of negative contributions to the sinking fund . References. (Journal abstract)