Val Part 3

Question 1

Why is the YP single rate table also know as the present value of £1 per annum?

Answer 1

Because the VP is worth £1

Question 2

What are the three principal sources of investment?

Answer 2

Gilts
Equities
Property

Question 3

What is a bond investment?

Answer 3

Fixed capital and fixed income investment

Question 4

What is the major attraction of property investment?

Answer 4

-Potential for high returns
-Easy to enhance value (do it up)
-Performance can be improved with proactive positive management

Question 5

Disadvantage of property as an investment?

Answer 5

-Entry level is high
-no quick trade (sale time can take ages)
-high transfer costs (legal, agent)
-needs to be managed

Question 6

What techniques can be used to value an under rented reversionary investment?

Answer 6

Term and reversion
Hardcore / layer

Question 7

Explain the term and reversion technique?

Answer 7

The existing rent differs from the current market rent so the property has reversionary potential