Part 1 Flashcards
What are the 5 methods of valuation?
Comparable, Investment, Profits, DRC and Residual
How do you decide which valuation method to apply?
I consider the type and use of the Property, the availibilty of evidence and purpose of valuation.
What is a years purshase multiplier?
the multiple of rent an investor would pay for a property
Example of good covenant and how this might impact the valuation?
tenant with storng financial record - long lease, secured income - lower yield -
What is a PI insurance?
PI protects you against claims for loss or damage made by clients or third parties as a result of the impact of negligent services you provided
Why do survyors need PI?
gives you protection in the event that you are accused of providing incorrect or faulty advice which causes financial loss to your client.
What level of PII cover dose your firm have?
1 Million USD on any claim
How would distinguish limitations on liability in your valuations?
By including a liabilty cap in ToE and report
What should be included in ToE and Report? and where is it covered in teh redbook?
ToE - 18 requirments VPS 1 , Report - 16 requirments VPS 3
Fair Value?
the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date - IFRS 13
MV vs FV?
0
What is the valuer registarion scheme ?
The Valuer Registration scheme is a quality assurance mechanism that monitors all registered RICS members who carry out valuations within the scope of RICS Valuation Standards “Red Book” in order to ensure consistent standards.
are there any instences where certain sections of teh redbook may not apply?
Read - PS1 and PS2 by George
Addtional criteria for secured lending valuations?
VPGA 2
Yield
the total income an investment generates over a set period, expressed as an annual percentage
Net Yield
“Net yield” is the yield after paying for any costs relating to that income such as fees or commissions, Rates, repairs and running costs
Reversionary yield
the anticipated yield, which the initial yield will rise to once the rent reaches the ERV and when the property is fully let
Equated yield
the yield on a property investment which takes into. account growth in future incom
Equivelent Yield
weighted average of the Net Initial Yield and Reversionary Yield and represents the return a property will produce based upon the timing of the income received.
Key issues in RICS survaying safely GN?
best practice for surveyors, including corporate and personal responsibilities relating to health & safety. - risk assesment , risk control
Grade A office
New or refurb, suspended ceiling, raised floors, high speed lifts, ample parking, within a CBD,
Optimum depth to allow natural light
1.5 times the window head height
Office hieght
2.6 meters
Easement
An easement is an agreement between two parties, where one is granted land access in exchange for a fee
Deleterious materials
Deleterious materials are materials or building techniques that are dangerous to health, environmentally unfriendly, tend to fail in practice or can be susceptible to change over the lifetime of the material.
Hazardous
ny substance or material capable of posing an unreasonable risk to health, safety
Rack rented
Passing rent equals or nearly equals the Market rent
Hardcore approach
It considers the current market rent being received and applies this on a perpetual basis • The difference between the current rent being received and expected market rent at the time of the lease renewal is also considered on a perpetual basis.
Law 2 2022
Sharjah Law No. 2/2022 amending Article 4 of Sharjah Law No. 5/2010, has restated the general position that the right of property ownership in Sharjah is limited to UAE and GCC nationals. However, it provides for a number of exceptions whereby the right of ownership can also occur, this includes areas and projects specifically determined by Sharjah Executive Council.
NPV and IRR
Net present value and internal rate of return
Term and reversion
The term and reversion method is used when the property has an
existing lease in place that is due to expire.
• The existing lease terms are considered separate from the expected
new lease terms within the valuation approach.
Topslice
overrent part of the rent
Marriage value
the addtional value that arises from combining to assets
whats is good will
Goodwill is an intangible asset when property or real estate is being sold or purchased • Goodwill is a value within the transcation that is higher than the sum of the net fair value • For example the Goodwill portion of the transaction maybe included due to special features of the asset being exchanged which may be associated with brand name, local customer base, excellent reputation etc • The Goodwill element will create a special value over and above the value of the land or building being exchanged.
EBITDA
earnings before interest, taxes, depreciation and amortization
