Factors to consider when choosing a valuation method
Introduction
Valuation of real estate refers to the estimation of the most likely selling price (market price) or the worth of the property to an individual or group of individuals i.e. investment value (Baum and Crosby, 2008). There are many valuation methods. Methods such as the sales comparison, single capitalisation as well as the term and reversion are considered traditional approaches while others such as the discounted cash flow (DCF) and arbitrage valuation models are considered contemporary valuation approaches. Traditional valuation approaches are backward-looking, based upon the principle that a property’s value depends upon its economic and physical characteristics. On the other hand, Read more