ESM 524: Real Estate Development Appraisal
• There are two types of cash flows: cash inflows (where money is coming in to the investor via rent or […]
Curriculum
- 4 Sections
- 13 Lessons
- 10 Weeks
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- Real Estate Development Appraisal MaterialAn important task in viability appraisal (before applying viability indicators and their decision rules), is to estimate the cash flows. There are two types of cash flows: cash inflows (where money is coming in to the investor via rent or sale proceeds) and cash outflows (where money is going out from the investor). Cash inflow and outflows, accurately determined are the basic raw material used by viability appraisal to judge the attractiveness of the project.4
- PARTIAL VIABILITY EVALUATION (ASSESSMENTS OF COST EFFECTIVENESS)There are two principal partial evaluation indicators: first is cost-in-use analysis which considers costs (usually infrastructure costs) from the perspective of a prospective developer and second, virtual/sitting rent analysis which considers costs from the view point of the prospective tenant.3
- VIABILITY INDICATORS FOR ALREADY DEVELOPED PROPERTIESWhen the surveyor has estimated cash inflows and outflows, he is in a position to apply viability indicators and start making viability decisions.2
- VIABILITY INDICATORS FOR PROPOSED DEVELOPMENTS4
