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The Market Value Assessment of the Land Plots Encumbered with Mortgage Debt

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International Scientific Siberian Transport Forum TransSiberia - 2021 (TransSiberia 2021)

Part of the book series: Lecture Notes in Networks and Systems ((LNNS,volume 402))

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Abstract

The valuation issues of land plots, passed as a subject of mortgage, are considered. It is indicated that in modern publications on assessing the market value, sufficient attention is not paid to the specifics of calculating these land plots. It is noted that land plots are assessed by two approaches - profitable and costly, in each of their constituent methods, the presence of a mortgage debt should be taken into account. The limited application of the cost approach is noted. The methods of accounting for outstanding borrowed funds in direct capitalization and cash flow discounting, using the comparative approach methods are shown. Calculation schemes and formulas are given. Difficulties in determining the discount rate are noted; it is proposed to apply the method of boundary estimates, which makes it possible to overcome the uncertainty of information when estimating the discount value. In conclusion, it is noted that the recommended methods for assessing mortgaged land plots give an opportunity to take into account the theoretical position, according to which the market value of real estate, including land plots, decreases when various kinds of encumbrances are imposed. At the same time, as soon as the mortgage loan is paid off, the market value of land plots is increased.

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Authors and Affiliations

  1. Emperor Alexander I St. Petersburg State Transport University, 9 Moskovskiy Ave., Saint Petersburg, 190031, Russian Federation

    Sergey Kolankov

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  1. Sergey Kolankov
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Editors and Affiliations

  1. Rector of the Siberian Transport University, Siberian Transport University, Novosibirsk, Russia

    Aleksey Manakov

  2. Ulitsa, Khabarovsk Territory, Russia

    Arkadii Edigarian

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Kolankov, S. (2022). The Market Value Assessment of the Land Plots Encumbered with Mortgage Debt. In: Manakov, A., Edigarian, A. (eds) International Scientific Siberian Transport Forum TransSiberia - 2021. TransSiberia 2021. Lecture Notes in Networks and Systems, vol 402. Springer, Cham. https://doi.org/10.1007/978-3-030-96380-4_55

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  • DOI: https://doi.org/10.1007/978-3-030-96380-4_55

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-96379-8

  • Online ISBN: 978-3-030-96380-4

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