Valuation Techniques - Valuation of Real Estate

Valuation Techniques - Valuation of Real Estate - New!

Valuation of real estate is important to a variety of endeavors, including buy/sell of property, investment analysis, real estate financing, property insurance and the taxation of real estate. The valuation of real estate consists of a different process as opposed to other types of asset due to its unique characteristic.

The Valuation of Real Estate course covers the following four key sections that reflect the process of valuation of real estate:

  1. Defining Stakeholders (Buyer, Seller, Government etc.)
  2. Defining the Purpose of Valuation (Buy/Sell, Insurance etc.)
  3. Selecting Valuation Techniques (Cost, Income, Market Approaches)
  4. Defining Objects of Valuation (References/Standards, Variables, Step-by-Step Valuation)

Characteristics of Real Estate Valuation

The real estate market is more restricted to fewer transactions than consumer goods or services, which sometimes makes it difficult to obtain relevant market data about similar properties. Likewise, each piece of property carries specific characteristics (e.g., layout, location, quality etc.) that further distinguishes the properties on the market. The illustration below demonstrates the basic market factors and attributes of property that influence its value.

Stakeholders' Perspective in Real Estate

Understanding stakeholders play a key role in valuation of real estate. The main stakeholders in real estate valuation are the owners of the property, which can be distinguished into those who occupy the property; and those who invest and rent out property. The illustration below demonstrates difference between the two groups.

 

Valuation for investors is focused on income producing aspects of real estate, while the valuation for occupants focus on operational utilization of real estate. Understanding the specific needs of these stakeholders is one of the crucial factors to establish an appropriate valuation approach.

The Course

The course further focuses on the basic application of the valuation techniques and provides an elaborative and understandable case study that guides you through step-by-step valuation. Furthermore, you get familiar with the application of for example 'Highest and Best use' concept and you gain insights into different international valuation standards.

Covering the above mentioned areas, you will gain an holistic understanding of a real estate valuation process with practical insights into specific valuation steps.

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