Rent appraisal is conducted in market data approach, cost approach or income approach. This article aims to address and discuss the methodology of rent appraisal on the basis of cost approach. In Korea and Japan. the method of estimating rent in cost ...
Rent appraisal is conducted in market data approach, cost approach or income approach. This article aims to address and discuss the methodology of rent appraisal on the basis of cost approach. In Korea and Japan. the method of estimating rent in cost approach is called summation approach . while it is simply called cost approach in USA, without any distinction from the term used in the case of cost estimation.
To appraise rent in application of summation approach. the concept of beginning price should be established first. Besides. the expected rate of return should be included as a major factor in rent estimation, which should be multiplied to beginning price Therefore. this article discusses the concepts of beginning price and expected rate of return along with its decision method.
In particular, this article cites the legal grounds and the judicial precedents made by Korean Supreme Court in the hope of presenting good references for readers.