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Valuation Chpter 1 Tutorial
Valuation Chpter 1 Tutorial
Property
consists of the right of ownership, which entitle the owner to a specific interest or interests in what is
owned.
To distinguish between real estate, which is a physical entity, and its ownership, which is a legal concept,
2. Residual method, Profit method, Investment method, comparison method , Discounted cash flow
3b Cost Approach
a. Freehold - Forever belongs to owner, no perpetuity / no time limit such as LH99, highest form of
ownership. (-No transfer of ownership)
*Freehold owner can sell their land, retain, improve, develop, construct building, lease out.
*Leasehold - LH99/66 have to renew the lease at the authoritised place, Have expiry term of 99 years,
any transfer have to be approved by local authorities
5. Property Valuation is a profession of valuation managed by a certified valuer with a legal fee /
a process developing an opinion of value for an identified interest in a specific real estate as of given
date
*It requires careful consideration of a number of variables before opinion of value can be substitute in
math proven formula
Extra
a. Valuation is both art and science (may be quantitative, but requires subjective judgement and state of
opinion
c. Garbage in Garbage out (Depends on our effort in researching which result in our quality of valuation)
e. Good valuation does not provide a precise or accurate value (It depends on the method used by each
valuer/depends on historical data to estimate current worth of the subjected property
f. Both valuation process and method are important (It will help us to determine a more suitable
method of valuation and make a better decision.