Property Development Essay Example | Topics and Well Written Essays - 3000 words

Property Development - Essay ExampleWith the help of a showcase example the paper will mainly highlight the merits of traditional residual valuation approach over other valuation methods.Property valuation and assorted property valuation techniques has been a subject of penetrative discussion between researchers, academicians and developers. Different approaches to property valuation have been widely contested between different stakeholders. The issue of property appraisal often takes socio-political color collectible to the range of stakeholders directly affected by the process. According to Williams and Ventolo (2001, p-65), grocery store value gist the most probable price which a property should hold in a competitive and open market under all conditions requisite to a fairish sale, the buyer and seller each acting prudently and knowledgeably and assuming the price is not affected by undue stimulus. Though the theoretically property valuation is defined by some others Hami d (1996)as means to interpret market without the personal bias, value, emotion and poor assumption, property appraisal is often looked from a personal perspectives of buyers and sellers. Kahr and Thomsett (2005 p-48) states that valuation is distinguished via attributes of properties and markets further classification of value are based upon the priorities of investors or owners, including hard cash flow and potential rental income tax benefits or limitations and perception of future growth in market value. Principles that guide the valuation are Progression this formula implies that the value of property will growing due to market demand and better locality.Regression this principle implies that opposite of above principle also holds received when the value of a property may decrease due to negative market sentiments.Conformity The principle states that valuation of property lists to appreciate with the similar properties in a similar location. Substitution This principle impl ies that a propertys greatest potential market value is also limited by the valuation of similar properties in a similar locality.Change This principle tells that all variables used for valuation tend to change resulting in changes in value of the property. Anticipation This principle implies that valuation depends upon the expectation of future growth. Contribution This principle states that the enthronization on an existing property may contribute in valuation, though it is not necessary that increase in valuation is equal to investment.Plottage This principle implies that the consistency in ownership, zoning and usage of kill tend to increase the value of land. Highest and best value This principle states that the value of a land is maximum when the land is utilized in best possible manner.Competition This principle implies that the valuation of a property varies fit in to supply and demand of properties in market. Property appraisal aims to determine different type of values such(prenominal) as market value, value in use, investment value, insurance and taxable value, and liquidation value, which gives rise to imply of different valuation methods and standards. These valuation systems also vary in different countries according to their laws and economic practices. In, UK basketball team valuation methods are used which are discussed in following sections whereas in US