16634 Lecture Notes - Lecture 7: Fee Simple, Net.
Document Summary
Lecture 7: topic 4 valuation of leasehold interests. If a person owns and occupies a parcel of land together with any improvements thereon, that person is said to possess the fee simple in the land. This interest in land can be valued using analysis of comparable sales. However, if the land owner in fee simple leases the whole or a part of the land, then there will be a lessor"s interest and lessee"s interest. In this case each party has a valuable interest of which you as a valuer would have to estimate the value; namely, the interest of the tenant (lessee) and the reversionary interest of the owner (lessor). In this topic we will deal with the valuation of property affected by leasehold interest and discover various methods of application. In addition, we will look at determining effective rents from incentives offered to tenants or premiums paid by tenants.
