Valuation SOE Questions Flashcards
Understand and Learn my case study and Qs
What are the limitations of KEL?
The outputs are only as good as the inputs, therefore careful attention is needed.
Always important to have the report peer reviewed.
Can you describe the tenancy profile of your office in Cardiff?
The office comprised of 5 floors. 2 Floors were vacant and the remining floors were under rented.
How did you account the vacant floors in your valuation.
I adopted a void of 12 months and a tenant incentive of 6 months rent free.
Also accounted for void costs including business rates, service charge shortfall.
Also adopted a higher yield to reflect the risk.
In your example of the retail unit in the West End, can you describe what you meant by basement of poor condition.
How did you account for this in your valuation?
Yes, it was in a state of disrepair, including cracking of paint, and had out dated wiring and lighting. Had a low floor to ceiling height of 1.8m.
Accounted for it by adopting a low A/20 rate. (derived from speaking to agents)
In what instances would you not use Zoning on a retail unit.
Example could be when the frontage does not effect footfall and value.
e.g. a vets.
What are the different types of frontage?
Hard (Banks), return (10%+) & narrow.
Check with local agents.
For a recently rented property do assume it is rack rented?
Don’t just take the agents word, need to conduct your own analysis and consider the market.
How can vacancy effect the yield profile?
Vacancy would have an effect on the net initial yield as it would be lower. Need to consider the EY.
How does a loan security valuation vary from a valuation for accounts purposes?
Market value and
