costs and taking that out the maths is better developed in the study guide you get most of your data from comparable sales and corporal circumstances it’s important for the valuer to be aware of the differences between markets and sub markets it’s also important for the valuer to be aware the different types of properties will have tendencies
that have slightly different yields because Gold Coast Land Valuations sometimes of issues that local issues such as obsolescence and depreciation issues for instance an older building will often have a higher yield than a younger building and valuers might look at that and how that seems to be a bit upside-down as a student you look at it and in fact it makes a little bit of sense because the rent is not going to change that much between a older building and a younger building however some shrewd investor looking at buying an older building knows that all the building is going to need major
capital works in the not-too-distant future what that means is that an investor will not be prepared to pay as much and so in terms of looking at the yield they’ll be looking at a lower capital value because the older buildings not worth as much however the rent is that much lower and so the big drop in the capital value compared to the small drop in the rental means that you have a higher yield there are having a bit of a sensitivity what makes your yields go up and down especially looking at the characteristics of the building characteristics of the sub market and also the economic cycle are all important skills if you like to be able to develop and some of the hints for those are developed in the study guide so go back now and look at the study guide and also read the pages of the text in Whipple’s there’s only a few of them from the text for this
week most of the text in whipple is devoted to the discounted cash flow approach which is introduced in the study guide we don’t really take DCF any distance in this course we deal with it further in our finance and advanced valuation courses so we don’t need to read the rest of whipple in this course any further so you’re relieved a very much activity in that regard however it’s important to really do the field exercises and also look at taking the opportunity to do exercises to try this out with both residential but especially with commercial examples to really get on top of how it works because it’s it’s worth doing a little bit of practice with