MMP111 Lecture Notes - Lecture 7: Capitalization Rate, Net Present Value, European Cooperation In Science And Technology
15 Aug 2018
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Document Summary
Land + building components obsolescence = value. Market extracted depreciation costs to bring an existing structure up to the physical condition and functional utility occupants desire. A property is valued based upon a comparison with the cost to build a new or substitute property. Adjustment for property interest may be applied. Replacement cost: the estimated cost to construct (at current prices as of the effective valuation date) a substitute for the building being valued using modern materials and current standards . Reproduction cost: the estimated cost to construct (at current prices as of the valuation) an exact duplicate or replica of the building being valued, using the same materials, construction standards. Indirect: administrative costs, professional fees, financing costs, tax. Insurance: marketing / sales / lease / agents, entrepreneurial incentive (land + labour + capital + developers profit ) Comparative unit dollars per unit of area.
