Monthly Archives: November 2012

Investment Approach: Method of Valuation of Real Estate

Investment Approach is one of the three methods used in estimating the market value of real estate. The other two methods are: Sales Comparison Approach and Cost Approach. In this article, I discuss the investment approach. Investment Approach is also referred to as the Income Capitalization Approach. You arrive at the value of real estate by multiplying the rent by a factor. The logic here is that the value of real estate is determined by how much rent you can get from it. Read more »

Sales Comparison Approach: Method of Real Estate Valuation

Sales Comparison Approach is one of the three methods of real estate valuation. The other two methods are: Investment Approach and Cost Approach. In this article, I will discuss the first method, sales comparison approach. In my subsequent articles I will discuss the other two methods.

Sales Comparison Approach is the easiest to understand method of estimating the market value of real estate. In this method, you arrive at the value of one real estate by comparing it with prices of other real estates that have been sold. The logic is, if that property was sold for that much, then this property should sell for this much. This amount is then the market value of the property. Read more »

Market Value: The two key words you cannot ignore in real estate

Market Value is defined as: “The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

Market value is a concept of the market. Read more »