123ArticleOnline Logo
Welcome to 123ArticleOnline.com!

ALL >> Investing---Finance >> View Article

The Importance Of Property Surveys In Joint Ventures

By Author: Chris Westerman
Total Articles: 137

Joint ventures in land depend on surveys to document investment quality.


Land investments are subject to an apples-to-oranges dilemma in establishing pricing. But the industry has survey methods that investors depend upon.



All property carries some value, but the conundrum is that land and buildings are akin to snowflakes: No two are alike.


For example, Parcel A of 20 acres may carry a magnificent view of the sea and enjoy just the right amount of access from a highway. Parcel B, 20 acres situated across the road, might stretch up a steep, rocky hillside and be riddled with industrial waste from decades ago. Further, one or both parcels may not have been sold for generations, which leaves an absence of comparative numbers of then-versus-now valuations. Participants in joint ventures in strategic land investment are well advised to invest in A over B for obvious reasons.


This is why all real property undergoes property or land surveys, which help determine the market value of the asset. The outcome of a valuation is particularly important for investors who may not even physically inspect the property but who instead depend on land investment specialists to identify and manage the investment.


A property survey involves looking at a property for both its tangible characteristics as well as anything that can impact its value in the future. A “cost-“ or “summation approach” to valuation takes into account the land minus the cost of depreciation or replacement of buildings on the property.


For individuals and institutions participating in land investments and commercial property that will be rented (including those purchased in joint ventures), the “investment method” is used. This method takes into consideration the potential income stream for renting the property, as demonstrated by the rental rates of similar properties in the immediate vicinity.


A variation on the investment method is the residual method, used for properties that are raw and likely to be developed. This method requires a well-considered plan for how it will be developed, taking into account the following:


• Land value


• Development costs


• Site preparation costs, including demolition of existing buildings, decontamination and remediation (in brownfield lands), and construction of roads and service diversions


• Fees (legal, selling agents, stamp duty land tax, options costs)


• Minimum profit requirements


• Gross development value for the completed development


Land investment consultants necessarily must provide full accounting in a prospectus document to potential joint venture participants. Potential investors should also engage the services of an independent financial advisor to determine if and when a land investment is an appropriate component of their investment portfolio.

Total Views: 76Word Count: 418See All articles From Author

Investing / Finance Articles

1. Reliable Forex Robot Can Enhance Your Success Rate In The Forex Market
Author: johnsyanol

2. Donate To Ngo And Save Tax – Know How
Author: kanan james

3. The Asquith Group Tips On How To Get Out Of Debt
Author: Ava Kraegen

4. 5 Mistakes You Must Avoid In Sip
Author: Hetal Pandya

5. Taking A Loan On Property Is Now A Piece Of Cake!
Author: Hero FinCorp

6. What To Expect From A Credit Union Vancouver Wa
Author: Brian Miller

7. Top Reasons To Rely On An Oregon Credit Union
Author: Brian Miller

8. Credit Union Vancouver Wa Advantages
Author: Brian Miller

9. Auto Insurance Tips
Author: a plus auto insurance

10. Genuine Forex Robot Can Help You Make Good Profits Within No Time
Author: johnsyanol

11. Current Home Loan Interest Rates | Home Loans In Chennai
Author: Loansa Assis

12. Home Loans Scheme For Low Income Earners In Nsw
Author: Declan Murphy

13. Low Deposit Home Loans – Options Are Still There When You Search For Campbelltown Home Loans!
Author: Mc Cutcheon

14. House Construction Contractors In Bangalore - 9739667778
Author: citadilconstruction

15. The Southbourne Tax Group Review: The State Of Play On Tax Evasion And Avoidance
Author: Jae Fomby


Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: