Approach Improvement And Application Research Of The Fair Value Evaluation Of Investment Real Estate

Real estate appraisal is gradually developed along with the marketization of the domestic real estate industry.Real estate appraisal is the behavior of professional asset appraisers to estimate the value of real estate specific rights at a specific point in time according to specific evaluation purposes.Since investment real estate is a real estate held by a company to earn rent or capital appreciation,or both,which is different from other types of real estate in the evaluation process.The “Guiding Opinions on Investment Real Estate Evaluation” clearly stipulates that the evaluation approach frequently used includes the market approach and the income approach.Since the market value of investment real estate fluctuates greatly,the cost approach generally does not apply to the fair value assessment of investment real estate.Firstly,the paper expounds the theory of fair value evaluation of investment real estate and analyzes the basic principles of market approach and income approach.However,it mainly relies on the experience and judgment of the appraiser to correct the factors of the market approach and the weight of each factor has not been taken into consideration in practice.This paper selects the influencing factors related to the object to be evaluated and establishes a perfect indicator system to make up for one of the shortcomings.It is quantified by scoring approach,and finally the analytic hierarchy process is used to calculate the index weights and the evaluation results are obtained.When the income approach evaluates the fair value of investment real estate,it is easy to have uncertainty in the selection parameters.This paper uses Monte Carlo simulation to define the unit annual rent,vacancy rate and discount rate as random variables and quantify the uncertainty to obtain the most probable evaluation result,and the point estimate of the parameter is expanded to the interval estimate.Then,this paper selects a specific case of fair value evaluation of investment real estate of Dima,and evaluates the case by market correction approach,analytic hierarchy process,traditional income approach and Monte Carlo simulation income approach,and compares the results.After analyzing,it is found that the error of the evaluation result is smaller after using the analytic hierarchy process to correct the coefficient and weight of the market approach.Compared with the traditional income approach,the Monte Carlo simulation modified income approach takes into account the uncertainty of investment real estate,and the evaluation value is more in line with the reality.Based on this,the paper considers that the best approach for evaluating the fair value of investment real estate is Monte Carlo simulation of the improved income approach based on the purpose of evaluation and the evaluation object.Finally,based on research results,this paper puts forward suggestions from four aspects: rational selection of evaluation approach,improvement of special asset evaluation process,improvement of professional quality of appraisers and enhancement of resource sharing of evaluation institutions,in order to improve the evaluation quality of fair value evaluation of investment real estate and recognition of evaluation across all industries.