Research On Assessment To The Value Of Times Building Real Estate

With the development of China’s socialist market economy and financial systemreform, China’s state-owned commercial banks turned from credit-based mode tomortgage-based mode. It became important between banking and capital demand sideof the business dealings that financing through asset-backed. The mortgage lendingsystem has become an important measure for commercial banks to preserve assets,prevent risk and mitigate risk. Secured asset value assessment has also become anobjective need, it played an important role in maintaining the security of credit assetsof financial institutions and in maintaining the healthy development of the financialmarkets. The income approach is the preferred and indispensable assessment metho dsfor real estate collateral value assessment, in particular the profitability of real estate.How to grasp the two parameters including net income and discount rate in theprocess of applying for income approach and how to use the income approach toassess the mortgaged real estate and provide convincing results is an important issueto be solved in reality.Firstly, a brief introduction to literature at home and abroad on the mortgageasset valuation and income approach, then the theoretical explanations in assessmentof real estate mortgage and the income approach. Analysis the choices of the type ofmortgage assessment value, as well as the importance of determine the threeparameters in application of the income approach. Based on a theoretical basis, in thecase of mortgage asset assessment Times Building in Huanggang city, have a concreteanalysis of general factors, regional factors as well as individual factors about TimesBuilding, which impact the appraised value of it. Then use the formula that netincome equal to the effective gross income minus operating expenses to determine netincome; then introduce security interest rate plus a risk adjustment method of themathematical model and the coefficient way to determine the discount rate; afterdetermine the years of income, choose an appropriate income approach formula toassess the the commercial portion of Times Building and the residential portion of it.Finally, draw the conclusion of the collateral value of Times Building.