Scribd Logo
Upload

Welcome to Scribd!

  • Non-Monetary Cost

    Uploaded by

    Akshit Kala
    20 views6 pages
    The document discusses the non-monetary and monetary costs and benefits of buildings. Some non-monetary costs include environmental impacts, increased traffic, and loss of trees and views. Monetary benefits come from direct payments like rent and sale prices, as well as indirect economic benefits. There are three approaches to estimate building value: cost, market, and income approaches which focus on expected income over time. Factors like maintenance, supply and demand, and location impact future sale value.

    Original Description:

    Original Title

    Non-monetary cost.pptx.pptx

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document discusses the non-monetary and monetary costs and benefits of buildings. Some non-monetary costs include environmental impacts, increased traffic, and loss of trees and views. Monetary benefits come from direct payments like rent and sale prices, as well as indirect economic benefits. There are three approaches to estimate building value: cost, market, and income approaches which focus on expected income over time. Factors like maintenance, supply and demand, and location impact future sale value.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    20 views6 pages

    Non-Monetary Cost

    Uploaded by

    Akshit Kala
    The document discusses the non-monetary and monetary costs and benefits of buildings. Some non-monetary costs include environmental impacts, increased traffic, and loss of trees and views. Monetary benefits come from direct payments like rent and sale prices, as well as indirect economic benefits. There are three approaches to estimate building value: cost, market, and income approaches which focus on expected income over time. Factors like maintenance, supply and demand, and location impact future sale value.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 6

    NON-MONETARY COSTS OF BUILDINGS

    INTRODUCTION
    THESE INCLUDE THE FOLLOWINGS:
     ENNVIRONMENTAL IMPACT

     INCREASED TRAFFIC

     LOSS OF TREES AND VEGETATION

     LOSS OF VIEWS OR SUN INCIDENCE AT CERTAIN TIMES OF DAY

     POLLUTION

     STORM WATER RUNOFF WITH POSSSIBILITY OF FLOODING

    THESE NON-MONETARY COSTS INCLUDING BENEFITS NEED TO BE


    ANALYSED TO ASSESS THE OVERALL IMPACT IN THAT AREA.
    MONETARY BENEFITS OF BUILDINGS
     THE INVESTORS AS WELL AS DEVELOPERS ARE IN BUSINESS TO

    SELL THE BUILDINGS AS SOON AS POSSIBLE AFTER COMPLETION


    TO EARN PROFIT
     PROFIT IS THE DIFFERENCE BETWEEN THE COST INCURRED AND

    SALE PRICE OF THE BUILDING


     MONETARY BENEFITS ARE DERIVED FROM THE FOLLOWINGS:

     DIRECT MONEY PAYMENTS IN THE FORM OF THE RENT OR

    LEASE OR THE SALE PRICE


     INDIRECT ECONOMIC BENEFITS DERIVED FROM THE

    PRODUCTION OF OTHER AMENITIES ON THE PREMISES

    HOW TO ESTIMATE VALUE FOR BUYERS:

    THREE BASIC APPROACHES ARE THERE


    1. THE COST APPROACH
     DEALS WITH EQUATING VALUE WITH THE COST OF PRODUCING

    A BUILDING

    2. THE MARKET APROACH

     LOOKS AT WHAT BUYERS OF SIMILAR PROJECTS IN THE SAME

    AREA HAVE BEEN PAYING

    3. THE INCOME APPROACH OR INCOME CAPITALIZATION APPROACH

     FOCUSES ON THE ECONOMIC VALUE OF THE STREAM OF

    INCOME A PROJECT IS EXPECTED TO GENERATE OVER TIME


    APPROPRIATE FACTORS FOR INFLATION AND APPRECIATION TO
    ORIGINAL SALE PRICE SHOULD BE ADDED FOR FUTURE SALE PRICE
     THE VALUE OF THE BUILDING IS CLOSELY RELATED TO THE LEVEL

    OF MAINTENANCE OF THE BUILDING EVERY YEAR


     IT IS POSSIBLE TO KEEP A BUILDING IN FULL EARNING CAPACITY

    INDEFINITELY; THE ANNUAL MAINTENANCE AMOUNT NEEDED IS


    CALLED 100% MAINTENANCE LEVEL
     ANOTHER FACTOR THAT WILL DETERMINE THE FUTURE SALE

    VALUE IS SUPPLY OF
     AVAILABLE SIMILAR BUILDINGS

     AVERAGE OCCUPANCY RATE FOR THIS TYPE OF BUILDING

     THE OPERATING AND OWNING COSTS OF PROPERTY IN THE LONG RUN

     OVERALL PROJECTIONS REGARDING THE RISE OR DECLINE OF


    PROPERTY VALUES IN THE AREA
     LOCATION OF THE BUILDING
    INCOME PRODUCING PROPERTIES: LEASE AND RENT
     THE RENTS CAN BE CHARGED IN ORDER TO RECOVER THE COSTS OF

    CONSTRUCTION, FINANCING AND SO ON BREAK EVEN.


     INFORMATION ON VALUES OF SALE PRICE, EQUIVALENT RENTALS, AND

    THE PERTINENT INFATION, APPRECIATION AND DEPRECIATION


    FACTORS, FUTURE VALUE OF RENTALS AND SALE PRICES CAN BE
    EASILY ESTIMATED.

    CALCULATION OF RENTAL INCOME:


    RENTS ARE PAID MONTHLY BUT FOR PURPOSE OF ESTIMATING
    ECONOMIC WORTHWHILENESS ARE CALCUATED AS ANNUAL
    PAYMENTS

    RENTn = RENT0 x (1+ INFLATION)n WHERE n IS FUTURE YEAR


    NON-MONETARY BENEFITS OF BUILDINGS
     WHEN AN OWNER OCCUPIES AND USES BUILDING EITHER FOR

    RESIDENTIAL OR FOR BUSINESS PURPOSES, THERE IS NO CASH


    TRANSACTION INVOLVED

    You might also like