The Valuation of Freehold and Leasehold Interests
Part of the Macmillan Building and Surveying Series book series (BASS)
It has been shown in Chapters 3 and 5 that one method of obtaining the capital value of an interest in property is the Investment Method, namely
Net income may be derived from the rent received per annum less outgoings. Years’ Purchase will differ according to the yield an investor expects from the property investment; it is suggested that the reader uses the pattern of yields included in Chapter 3 as a guide when carrying out valuation exercises.
Capital value = Net income per annum × Years’ Purchase
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© David Richmond 1994