Effectiveness of income valuation method as an alternative to depreciated replacement cost method
No Thumbnail Available
Date
2017-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
EiABC
Abstract
For different types of properties varies valuation models were developed. Although, the basis of valuation might be the same, the methodology may sometimes differ to capture certain peculiarities and attributes in respect of a particular property. In an ideal situation, the income valuation method of valuation should be adopted in the valuation of commercial properties. Where this is not attainable, the depreciated replacement cost method is adopted. The aim of the study is to examine the effectiveness of the use of income valuation method as an alternative to depreciated replacement cost method in valuation of commercial properties. The instruments used for data collection are interviews, site inspection, and document review. The study adopts the depreciated replacement cost method and income method of valuation in analyzing the data obtained. Complete theoretical analysis was equally adopted in analyzing the data. The findings reveal that the income valuation method may provide a reliable estimate of value in the where improvements increase in age, but for new buildings the replacement cost method is more reliable. The revealed results confirmed the importance of income method of valuation as the most effective and efficient in the estimation of commercial property. The study recommends the bank to use the income valuation method to check the estimation valued by replacement cost method.
Description
A THESIS SUBMITTED TO THE SCHOOL OF GRADUATE STUDIESIN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE DEGREE OF MASTER OF ARTS IN URBAN LAND AND PROPERTY VALUATION
Keywords
Income valuation method, Depreciated replacement cost method,, commercial properties