Valuation competency level 2 Flashcards
Investment method - Walsall
Why did you decide to value the warehouse and office block separately?
I valued the properties separately as they were let to separate companies on separate leases. Therefore, to get the market value I needed to take account of the current tenancies.
Investment method - Walsall
How did you undertake the term & reversion valuation
I ascertained the market rent for the subject property. I decided the properties were under-rented after looking at the passing rents. I then capitalised the passing rent (term) for the remaining life of the lease. I then capitalised my market rent into perpetuity deferred by the amount left on the lease. Added the two together to arrive at a capital value.
Investment method - Walsall
What yield did you adopt in your valuation?
I adopted a gross yield for the reversionary element. I reduced the yield by 1% to reflect the lower risk of the passing rent.
Investment method - Walsall
Why did you adopt a gross yield?
To ascertain the market value without any deductions for purchasers costs and taxes. (In line with IHT valuations)
Comparable method - Birmingham
Tell me about the construction of the property.
It was a traditional brick and tile property. I assumed the property was in a reasonable state of repair as was requested not to inspect.
Comparable method - Birmingham
What adjustments did you make?
I adjusted for:
- Locality
- Size
- Age
- Accommodation
- Modernisation (Such as kitchen and bathroom)
- State of repair
- Parking / garaging
- Garden
- Valuation timings
Comparable method - Birmingham
How did you analyse and present your findings?
I presented my findings in a table format ranking my evidence from strongest to weakest. I also provided commentary on my adjustments and final valuation figure.
Comparable method - Birmingham
What advice did you give to DWP? Why did you they request the valuation?
DWP required the market value of the property to ascertain the assets of the taxpayer. This allows them to calculate rights to benefits and pensions. I advised them of the market value of this property alone.
Comparable method - Birmingham
Why did you do a 50% share of the valuation?
I did a 50% share valuation as per the instructions from HMRC.
Comparable method - Birmingham
What do you mean by 50% arithmetic share>
A straight half. I did this as the co-owner was willing to sell, so no proceedings were required to get vacant possession.
DRC method - School
Talk me through the steps of the DRC valuation
Step 1 - I ascertained the replacement cost of a modern equivalent building.
Step 2 - I adjusted for age and obsolescence to the characteristics of the subject.
Step 3 - I added back in the land value of the site and added to the replacement cost to get the capital value.
Step 4 - I stood back and looked to ensure my valuation looked reasonable.
DRC method - School
How did you calculate the replacement cost of the school?
I used BCIS for construction costs of a modern equivalent and applied to the size of the subject. This was adjusted for location and pupils.
DRC method - School
Why did you inspect the property if you had a condition survey?
An inspection was requested by the client. Also assisted me in valuing the property so I could ascertain the quality, locality and functionality of the property.
DRC method - School
How did you adjust for the timber roof?
I adjusted by calculating the life of a felted flat roof and then estimated the remaining life of the roof in situ. I divided the remaining life by the estimated life x100 to get a percentage. (10 / 50 x100 = 20%)
DRC method - School
Was this a red book report? Did you report the value yourself?
Yes this was a red book for accounting purposes. I did not, I communicated my opinion to a senior valuer who agreed and reported the valuation to the client.
