5 Methods of Valuation

Question 1

1. Comparable method

Answer 1

Comparing similar properties in similar locations within a similar period of time

Question 2

2. Investment method

Answer 2

Worth estimated on grounds of projected income

Question 3

3. Profits

Answer 3

Value of the profitability of the business that occupy the property and not the land/property itself. e.g. hotels, cinemas.

Also known as the Income Approach

Question 4

4. Residual

Answer 4

Valuation of land with development potential.

Question 5

5. Depreciated Replacement Cost

Answer 5

The current cost of replacing an asset with its modern equivalent