Income producing properties valuation

Running Head : Income producing properties valuation

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1 . Literature review

1 .1 . Introduction

Before an investor can make any decision regarding income producing properties , a wide array of information is required to aid him in making a decision . One of these sources of information is valuation which gives an estimate of the value of the subject property . The estimation of the value of income producing properties is known as the appraisal process

br Various methods are used is estimating the value depending on the circumstances surrounding the property , the nature of the property and information available from the market . These methods will be discussed in this section of the study . The appraisal process goes through six major steps with the last one being the implementation of the selected method (Brueggeman and Fisher , 2005 . The first step is to identify the property physically and legally before any kind of procedures can be undertaken . The property rights to be valued such as fee simple , leased fee estate among others are then identified . The third step is to specify the purpose behind the valuation followed by specification of the date of estimated value . The fifth step is among the most important and it involves the collection and analysis of market data . During this procedure market data such as supply and demand factors , expenses , rents and vacancies among other important market data must be considered because they are likely to affect...