16234 Lecture Notes - Lecture 4: Capitalization Rate, Contract, Public Liability
17 Aug 2018
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Insurance: tenant, public liability, plate glass?, must produce policy, landlord. If the property is unusable or partially unusable, the rent will be totally or partially abated: tenant must not transfer the lease without consent of the owner. In many cases the rent paid by a tenant may be either below or above market rent: this may occur due to changes in market rent and the method or frequency in which the property is reviewed. Capitalisation method of valuation: capitalisation: is the income method of assessing the value of a property. This yield is the return on investment and its termed by valuers as the capitalisation rate. In other words, capitalisation is a relationship of risk and return: the higher the risk, the higher the return and vice versa. Gross rent - property outgoings = net rent. Rate) = value: e. g, cap. rate are the reciprocal of the years purchase.
