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Property Finance, Property Valuation & Tax

Learn more about property finance, property valuation and taxation and how these issues affect property investment and real estate development activities.

Property finance, valuation and taxation are complex areas of property investment and we would always recommend that investors and developers seek independent, expert assistance when dealing with such matters. However, we also believe that prudent investors should have at the very least a basic understanding of such issues, especially those that are critical to achieving success.

Investment Property Partners have brought together a series of helpful guides, articles and other resources written specifically for property investors, property developers, and finance and investment professionals covering property finance and insurance, development appraisals, asset valuations, property tax issues and more.

More Property Finance, Valuation & Tax Resources…

Gross development value

Gross Development Value (GDV) – Property Developers Guide to Financial Appraisals

Gross development value, or GDV as it is commonly known in property circles, is an important valuation metric that all investors and property developers need to be familiar with when building their project and financial appraisals. The gross development value of a property investment project can be calculated to give a near accurate figure of what that property or real estate development project may be worth on the open market once all development works have been completed.

Gross development value is an essential tool for any real estate investor or property developer as it forms a key component in the development appraisal process.

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Parry's valuation and investment tables

Parry’s Valuation & Investment Tables for Property Investment Appraisals & Valuations

Richard Parry’s Valuation and Investment Tables were first published in 1913 and they have now become a must-have calculation tool for students, surveyors, property professionals, investors and real estate developers involved in property valuation, development and investment appraisal techniques.

Parry’s valuation and investment tables are used extensively throughout the professional property and real estate investment sectors and form an essential tool that no serious property investor should be without.

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REITs - UK Real Estate Investment Trusts

REITs & UK Real Estate Investment Trusts – Property Investors Guide

If you are a property investor and are reviewing opportunities for indirect investment in the property and real estate sectors then you may have already come across Real Estate Investment Trusts or REITs. A REIT or Real Estate Investment Trust is a specialist tax efficient investment vehicle built around real property assets and more specifically property rental activities. REITs are quoted companies or groups of companies that own and manage property, whether that is commercial or residential, with the aim of generating a rental income.

Investment Property Partners property investors guide to UK Real Estate Investment Trusts (REITs) includes a number of important factors that you may wish to consider if you are reviewing indirect property investment opportunities, and more specifically UK REITs.

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Contractors method of valuation

Contractors Method of Valuation for Commercial Property

In commercial property circles the contractors method of valuation, also known as summation, is a very useful valuation tool for aspiring property investors or real estate developers as it helps to identify the value of unusual or very specialist properties that rarely come to market, and are generally unsuited to other, more common valuation techniques.

The contractors method of valuation is not as well-known as some of the other commercial property valuation techniques that are more commonly used to determine property values.

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Property development finance guide

Property Development Finance – Guide to Funding Development Projects

Funding a residential or commercial property development project with the right sort of property development finance is important as it can impact significantly on the availability of cash to support the initial investment, cash flow throughout the construction phase and ultimately the profitability of the development project itself.

Many aspiring investors dream of becoming successful property developers – taking their own development project and design ideas from the drawing board and making them a reality, and more importantly generating lots of profit in the process.

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Property investment strategy

Property Investment Strategy – Investing in Property for Profit

If you are considering investing in property for profit, be it commercial property, residential buy to let property, land for redevelopment or even indirectly through a Real Estate Investment Trust (REIT) then having a well-defined property investment strategy with clear goals and objectives will be essential to your success. As an investor your property investment strategy is likely to be dictated by your personal circumstances and your ultimate investment goals and objectives.

In developing your investment strategy there are many factors for you to consider, you may have a capital sum to invest which has been left to you, you may have an amount of money available for investment due to redundancy or retirement, you may be more interested in investing for income as opposed to capital growth… these factors and more all need to be incorporated in to your property investment strategy to make it work for you.

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Residual method of valuation

Residual Method of Valuation for Land, Property & Development Appraisals

In property development circles the residual method of valuation is an essential valuation tool for any aspiring developer as it helps to quickly identify the value of a development site, land or existing buildings that have the potential to be developed or redeveloped.

The words “property development” and “development appraisal” should go hand in hand. This is because without a carefully constructed budget or detailed development appraisal in place, the risks associated with a development opportunity should be considered to be unmanaged and consequently the chances of achieving a successful project outcome are significantly reduced.

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Property yield, calculating yields and return on investment

Property Yield – Calculating Property Yields & Return on Investment (ROI)

For property investors the intelligent analysis of the financials behind their investment property acquisitions are crucial to their success. Investors need to be focussed on the return on investment or ROI their potential property purchase will deliver, and this is where property yield comes in to play.

To be a successful property investor you need a number of attributes… amongst other things, you need to know your market, understand what adds real value to the property buying and selling process and have tenacity and perseverance.

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Commercial property valuation using the profits method

Commercial Property Valuation Using the Profits Method

The profits method of property valuation is typically applied to commercial property valuations where the major value component is driven by the profitability of the businesses that occupy the buildings and not simply the land or buildings themselves. Situations where the profits method of valuation would be appropriate include hotels, guest houses, pubs and cinemas.

Despite the financial “facts and figures” practicality of the profits method however, one of the most popular techniques used to value commercial property is still the comparable method.

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Capital gains tax property disposals

Capital Gains Tax on Property Disposals – Guide for Property Investors

As a prudent property investor one thing you have to be wary of when you dispose of any property such as a building, land or a lease – whether you sell it, give it away, transfer it to a third party or exchange it for something else – is Capital Gains Tax.

The UK’s HM Revenue & Customs (HMRC) describe Capital Gains Tax as a tax that is payable on the profit or gain you make when you sell or dispose of an asset such as land or property.

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