A valuer is assessing a mixed-use property with retail ground floor and residential apartments above. The retail component shows a 6% yield while comparable residential yields are 4.5%. How should this complexity be addressed in valuation?
Correct Answer
D) Apply a separate capitalisation rate to each income stream
Mixed-use properties require separate analysis of each income component using appropriate capitalisation rates that reflect the risk and return characteristics of each use. This provides more accurate valuation than applying a single blended rate to the total income.
Why This Is the Correct Answer
Retail and residential income carry different risks, shown by their different market yields. Capitalising each stream at its own rate values each component on its own evidence before the results are combined.
Why the Other Options Are Wrong
Memory Technique
Exam Tip for Valuation
Common Mistakes to Avoid on Valuation Questions
More Valuation Questions
In applying the summation approach to value a heritage-listed property in Sydney, which additional factor must be specifically considered?
In Queensland, the statutory land valuation that councils use to levy rates is made by:
The comparable sales method of property valuation involves:
A Queensland property owner disagrees with the Valuer-General's valuation of their land. The owner may:
When valuing an income-producing property in Queensland using the capitalisation approach, a valuer primarily considers:
- → In Queensland, the 'highest and best use' principle in property valuation refers to:
- → A registered valuer in Queensland is valuing a specialised property such as a church with no comparable sales data available. The most appropriate primary valuation method would be:
- → A Comparative Market Analysis (CMA) prepared by a Queensland real estate agent differs from a formal valuation in that:
- → A developer in Queensland is considering purchasing a site for a residential subdivision. A valuer using the residual (hypothetical development) method would calculate the site's value by:
- → Which of the following factors would typically DECREASE the market value of a residential property in Queensland?
- → A Queensland seller asks an agent what her house is likely to sell for, and the agent decides to answer. What must he give her?
- → A Queensland agent recommends a reserve to a seller and must back it with a comparative market analysis. What should the CMA compare?
- → When conducting a property valuation in Queensland, what is the most critical consideration regarding comparable sales data?
- → What is the difference between 'site value' and 'capital value' as used by the Valuer-General in SA?
- → When valuing a rural property in SA, which of the following is a key factor that distinguishes it from suburban residential valuation?
People Also Study
Property Law & Legislation
110 questions
Agency Practice & Law
138 questions
Contracts & Conveyancing
106 questions
Property Marketing & Sales
129 questions
Related Study Resources
Previous Question
A valuer is assessing a mixed-use development site where the highest and best use analysis indicates potential for either residential apartments (NPV $8.2M, 18-month development) or commercial offices (NPV $7.8M, 24-month development). Current zoning permits both uses. What valuation approach and conclusion is most appropriate?
Next Question
A valuer is assessing a unique architectural property with no recent comparable sales. The property cost $2.5 million to build five years ago, current construction costs have increased 15%, and the valuer estimates 8% total depreciation. What is the indicated value using the summation approach?