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The
'Investment Method' is used for trading properties where evidence of
rates is slight, such as hotels, cinema, car park and etc.
In normal circumstances, a three-year average of operating income
(derived from the profit and loss or income statement) is capitalized
using an appropriate yield. Note that since the variables used are
inherent to the property and are not market-derived, therefore unless
appropriate adjustments are made, the resulting value will be
Value-in-Use or Investment Value, not
Market Value.
Although
it is complex, this method is essential to any
property valuation, especially for buy-to-operate investments. It is
frequently employed by financial and investment professionals when
valuing assets. |
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