Essay about Real Estate Portfolio Valuation Annotated...

The Authors studied why valuation estimates are likely to be biased estimates of market values due to clients influence. The studies were done on the behaviors of clients in the UK, USA, and New Zealand. The authors pointed out that the information found has made a significant contribution to real estate literature, but the purpose of this research was to examine the prevalence of client influence and the impact on valuation in Nigeria. The survey found that nearly 80 percent of estate surveyors and valuers claimed some knowledge of client influence—mostly from private individuals. It did not state whether the clients were successful in influencing the surveyors and valuers to alter the valuation of their properties. Although the study†¦show more content†¦The Monte Carlo simulation inputs were described as using the physical real estate price volatility estimator based on cash flow derived from the residential real estate portfolio to provide more robust valuations than traditional DCF valuations. It is true that the Monte Carlo simulation method would make the real estate portfolio valuation more attractive. It is likely that the rental real estate cash flow will continue to grow. Why? Because many people have walked away from homes because of upside down mortgages; others lost their homes because of reductions in incomes or loss of jobs; and others because of natural disasters such as Hurricane Katrina, Tsunamis left them homeless. A large number of these people have decided to rent; some who may have never rented before—this creates a demand in renting. Therefore, using rents and price dynamics in real estate portfolios will look attractive, but the question is: Is it the correct way for the data to be presented or is this another method to influence valuations as discussed above in the Abdul-Rasheed and Aluko article, â€Å"client influence in residential property valuation†? Blazenko and Pavlov investigated the economics of real estate investment when maintenance of a property enhances neighborhood value. Because a property owner does not recognize this