Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

APC > Valuation > Flashcards

Valuation Flashcards

1
Q

The Global Red Book is being updated through 2024, what is being reflected in this?

A
  • implementation of Valuation Review recommendations
  • practice and process changes driven by evolving areas such as ESG and technology
  • information related to developments in other relevant global standards and regulation such as IFRS and Basel 3.1
  • administrative updates to align the standards with wider RICS objectives
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

When will the new Red Book be effective from?

A

1 January 2025

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What type of valuations does the Red Book not apply?

A
  1. Valuations for statutory purposes
  2. Valuations for internal purposes, not to be relied on by third parties
  3. Valuations for the purpose of activng as advocate
  4. Valuations for the purposes of acting as expert witness
  5. Valuations for the agency or brokerage
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the 5 methods of valuation?

A
  1. Comparable
  2. Investment
  3. Profits
  4. Contractor’s
  5. Residual
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Red Book - PS 1

A

Compliance with standards where a written valuation is provided

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Red Book - PS 2

A

Ethics, competency, objectivity and disclosures

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Red Book - VPS 1

A

Terms of engagement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Red Book VPS 2

A

Inspections, investigations and records

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Red Book - VPS 3

A

Valuation reports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Red Book - VPS 4

A

Bases of value, assumptions and special assumptions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Red Book - VPS 5

A

Valuation approaches and methods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

L2: Commercial, Guildford

What did you determine to be the market rent for the office space in your valuation?

A

£200/m2

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

L2: Commercial, Guildford

What did you determine to be the market rent for the retail space in your valuation?

A

£600/m2 ITZA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

L2: Commercial, Guildford

What yield did you use and why?

A

10.5%

This was slightly higher than the market evidence to reflect the increased risk of the location of the subject.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

L2: Commercial, Guildford

Did you use NIY or GIY?

A

NIY (CHECK?)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What’s the difference between NIY and GIY?

A
17
Q

L2: Commercial, Guildford

What did you determine the total market rent of the property to be?

A

£33,900 pa

18
Q

L2: Commercial, Guildford

What amount did you allow for refurbishment costs?

A

£55,000

19
Q

L2: Commercial, Guildford

How did you calculate refurbishment costs?

A

Using BCIS - default period, ‘rehabilitation/conversion’, ‘320. Offices with shops, banks, flats etc.’, lowest (£468/m2)

20
Q

L2: Commercial, Guildford

What was the final value?

A

£250,000

21
Q

L2: Commercial, Guildford

What value significant features did you note on inspection?

A

Poor condition and inferior location to comparables.

22
Q

L2: Commercial, Guildford

How did you account for value significant features noted on inspection in your valuation?

A

Market rent and yield adopted

23
Q

What RICS document relates to using the comparable method of valuation?

A

Comparable Evidence in Real Estate Valuation, 1st Edition (2019)

(Guidance Note)

24
Q

When would you use the investment method of valuation?

A

When valuing an income producing property i.e. a rented property.

25
Q

When would you use term and reversion?

A

When valuing under rented properties. The term income is capitalised to the next lease event. The reversion is capitalised into perpetuity at a reversionary yield. If the current rent is market rent no need for the term.

26
Q

When would you use the hardcore/top slice method?

A

When valuing an over rented property.

27
Q

How does the hardcore/top slice method work?

A

The income flow is divided horizontally with the bottom slice being market rent, and top slice rent passing minus market rent until the next lease event. A higher yield is used on the top slice to represent increased risk.

28
Q

What is hope value?

A

Valuing arising from the expectation of future circumstances e.g. development potential

29
Q

What is marriage value?

A

Created by a merger of interests - physical or tenurial.

30
Q

What is a yield?

A

The income returned on investment as a percentage of the purchase price.

31
Q

What’s the difference between GIY and NIY?

A
32
Q

What’s the ARY?

A

APC (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions