MG - Valuation Flashcards
What are the 5 methods of valuation?
- Comparable
- Investment
- Residual
- Profits
- Contractors (DRC)
What is an equivalent yield?
What is a gross yield
What is the ARY?
Which guidance note can you refer to for determining hierarchy of comparable evidence ?
RICS professional standard for comparable evidence in valuation
What is the hierarcy of comparable evidence?
Cat A - direct and similar transactions
CATB - published information that is public ally available but need to verify it
Cat c - inflation rates, market trends, historic evidence and asking prices
What’s another lease apart from FRI and what would you have to do differently?
IRI LEASE
would have to treat this differently in a valuation as the landlord will have to pick up the external repairs
How did you value the industrial unit in telford?
UNDERSTAND WHAT YOU DID WITH THE YIELDS!
Was the break clause the next lease event?
Yes - two years from the valuation date
At what other points in the lease can you increase to MR?
Why did you value to the break?
Assume worst cvase scenaro - break was in 2 yrs team, then void periods, rent free, costs e.g. business rates - after this assume let at market rent
When valuing the industrial unit in telford what voids and rent free periods did you assume?
how does the length of time until the break clause affect the reversionary yield?
What are the risks of assuming it will be let at MR?
Tenant may not be able to afford new rent
was it a ll or a tenant break clause? / why does this affect your approach?
in the redi hmo portfolio what did underaking the dd involve?
in the resi hmo portolio what did you consider when selecting comps?
layout, modern kitchen spec? proximtiy to amenties,
what operating csots did you assume in the hmo val?
25% - deducted these from market rent to give net rent
what yield did you apply?
why are yield for hmos higher than ffor single dwellings?
single dwellings - less turnover so less voids and lower managemnt fees
what does YP ACTUALLY MEAN? - UNI NOTES?
How did you complete the valuation of the resi portfolio?
I took the capitalised net rent by the yield into perpeuity
Did you compare your value to vp?
yes looked at the MVs for the dwellings as single homes - was looking to see if there was a discount to VP (this is often around 10%) but in this case no discount as there was a strong period of rental growth
WHAT ARE PRIME YIELDS IN BHAM
i
What is the hierarchy of comparable evidence?
- direct market comps - e.g. completed open market transactions that are similar to your property in terms of location , situation, size
- General market data e.g. indices or commercial databases that give trends into the market
- other sources - interest rates, stock market movements that might give an indication
