Property Investment Appraisal (3rd edition)

Citation

Ye, X. (2008), "Property Investment Appraisal (3rd edition)", Journal of Property Investment & Finance, Vol. 26 No. 6, pp. 577-578. https://doi.org/10.1108/14635780810908415

Ten years after the publication of its second edition, the third edition of Property Investment Appraisal has now become available. In that time the text has not only become a standard reference on real estate programmes but it is also an essential reading for practitioners. It is suitable for students at different levels from undergraduate to postgraduate and, at the same time, it is also an immensely practical book, explaining a wide range of valuation techniques through worked examples thus enabling the informed reader to gain a better appreciation of the rationale of the methodology at a glance.

In terms of the structure of the book, it follows the successful format from the previous two editions. Each chapter is well signposted with a clear introduction of intent and a conclusion which draws the discussion together. The text itself is interspersed with many examples to illustrate the essence of the discussion.

There are three main parts to the book:

1. 1.

   Part One: Introduction. This part introduces some basic concepts and principles of property investment and appraisal.

2. 2.

   Part Two: Market Valuation Models. This is the core of the book. It critically reviews the evolution of valuation techniques first, and then goes on to discuss contemporary freehold and leasehold market valuations.

3. 3.

   Part Three: Investment Value and Worth. This is the highlight of the book. It includes a detailed case study. It summaries the whole book by applying the concepts and methods introduced in the first two parts of the book to practice and demonstrates clearly to readers how to carry out a valuation project in a simple step‐by‐step approach.

Certainly there are some new aspects that have been introduced into this third edition. For example, one of the noticeable differences is that the term “rational” has been more frequently used in the book. This is possibly because, in the financial field, researchers have started to challenge the “rational” assumption of traditional investment theories and to include psychological studies in attempting to understand market performance better. Although the research on this issue in the property market is still lagging behind the general investment market, there has been increasing awareness of the behaviour of valuers in undertaking property valuations. Several key existing studies on this subject have thus been included in the comprehensive bibliography.

In addition, and as a result of the current US credit crunch, the UK Chancellor of the Exchequer recently urged investors to become less reliant on credit rating agencies, and to pursue their own assessment. As a consequence, this third edition of the book could be useful for investors and their advisers to help in understanding how to optimise the use of the property assets they hold, so as to improve the performance of their portfolios.

All in all, from different aspects, this is a book that is worth having as a reference text and an invaluable guide through the minefield of property investment.