Property valuation and management

property valuation or land valuation is the process of developing an opinion of value for real

property (usually market value). Real estate transactions often require appraisals because they
occur infrequently and every property is unique (especially their condition, a key factor in
valuation), unlike corporate stocks, which are traded daily and are identical (thus a
centralized Walrasian auction like a stock exchange is unrealistic). The location also plays a key
role in valuation. However, since property cannot change location, it is often the upgrades or
improvements to the home that can change its value. Appraisal reports form the basis for
mortgage loans, settling estates and divorces, taxation, and so on. Sometimes an appraisal report
is used to establish a sale price for a property

Types of value
There are several types and definitions of value sought by a real estate appraisal. Some of the most common
are:

 Market value – The price at which an asset would trade in a competitive Walrasian auction setting.
Market value is usually interchangeable with open market value or fair value. International Valuation
Standards (IVS) define:
Market value – the estimated amount for which an asset or liability should exchange on the valuation
date between a willing buyer and a willing seller in an arm's length transaction, after proper marketing
and where the parties had each acted knowledgeably, prudently and without compulsion.

 Value-in-use, or use value – The net present value (NPV) of a cash flow that an asset generates for a
specific owner under a specific use. Value-in-use is the value to one particular user, and may be
above or below the market value of a property.
 Investment value – is the value to one particular investor, and may or may not be higher than the
market value of a property. Differences between the investment value of an asset and its market
value provide the motivation for buyers or sellers to enter the marketplace. International Valuation
Standards (IVS) define:
Investment value – the value of an asset to the owner or a prospective owner for individual
investment or operational objectives.

 Ad Valorem Tax Value – Is the value used for taxation purposes and is determined by the
collection of data through the mass appraisal process. The mass appraisal process applies the data
collected through various sources to real property to determine taxable value
 Insurable value – is the value of real property covered by an insurance policy. Generally, it does
not include the site value.
 Liquidation value – may be analyzed as either a forced liquidation or an orderly
liquidation and is a commonly sought standard of value in bankruptcy proceedings. It assumes a
seller who is compelled to sell after an exposure period which is less than the market-normal
time-frame
Property management is the operation, control, maintenance, and oversight of real estate and physical
property. This can include residential, commercial, and land real estate. Management indicates the need
of real estate to be cared for and monitored, with accountability for and attention to its useful life and
condition considered. This is much akin to the role of management in any business.
Property management is also the management of personal property, equipment, tooling, and physical
capital assets that are acquired and used to build, repair, and maintain end item deliverables. Property
management involves the processes, systems, and manpower required to manage the life cycle of all
acquired property as defined above including acquisition, control, accountability, responsibility,
maintenance, utilization, and disposition.
An owner of a single-family home, condominium, or multi-family building may engage the services of a
professional property management company. The company will then advertise the rental property, handle
tenant inquiries, screen applicants, select suitable candidates, draw up a lease agreement, conduct a move
in inspection, move the tenant(s) into the property and collect rental income. The company will then
coordinate any maintenance issues, supply the owner(s) with financial statements and any relevant
information regarding the property, etc.

Roles
There are many facets to this profession, including managing the accounts and finances of the
real estate properties, and participating in or initiating litigation with tenants, contractors and
insurance agencies. Litigation is at times considered a separate function, set aside for trained
attorneys. Although a person will be responsible for this in his/her job description, there may be
an attorney working under a property manager. Special attention is given to landlord/tenant law
and most commonly evictions, non-payment, harassment, reduction of pre-arranged services, and
public nuisance are legal subjects that gain the most amount of attention from property
managers. Therefore, it is a necessity that a property manager be current with applicable
municipal, county, state and Federal Fair Housing laws and practices.

GROUP MEMBERS
Faris Delil
Fitsum Tesfaye
Mikael Tamru
Mujib Abbas