Automatic Research of the Capitalization Rate for the Residential Automated Valuation: An Experimental Study in Cosenza (Italy)

Ciuna, Marina; Ruggiero, Manuela De; Salvo, Francesca; Simonotti, Marco

doi:10.1007/978-3-319-49746-4_20

Cited by 5 publications

(3 citation statements)

References 24 publications

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“…One of the main difficulties related to this approach consists in the choice of the capitalization rate, which defines the relationship between the value of the capital and the sum of money that is obtained from it in a certain period [21].…”

Section: Monetary Damage Evaluation: Methodological Issuesmentioning

confidence: 99%

Research of the Critical Capitalization Rate in Building Damage Appraisal

et al. 2022

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From the perspective of building health monitoring and property management, this research proposes some parametric measures of the capitalization rate, in order to define a range of significant values to be used in a cash flow analysis intended for monetary evaluation in partial building damage assessment. If criteria and methods for appraising partial damage to buildings are widely shared in the scientific and professional communities, the identification of the most appropriate capitalization rate is rather more controversial, and certainly more complex. The proposed approach borrows the logical principles of cash flow analysis based on the yield capitalization approach, considering both recovery costs and loss of incomes when building partial damage occurs. The procedure is a differential valuation that considers a situation before and a situation after the damage, basing on the cost approach and the income approach. In particular, two distinct conditions are considered: the case of recovery interventions and that of improvement.

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Section: Monetary Damage Evaluation: Methodological Issuesmentioning

confidence: 99%

Research of the Critical Capitalization Rate in Building Damage Appraisal

et al. 2022

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“…The application of the International Valuation Standards has prompted research to investigate the possibility of applying AVMs even in really complex real estate markets for different issues that are at stake, including best practices, real-life constraints, administrative procedures, software capabilities, expert competences, modeling frameworks, background theories, and more [29][30][31].…”

Section: Research Backgroundmentioning

confidence: 99%

Automated Valuation Methods through the Cost Approach in a BIM and GIS Integration Framework for Smart City Appraisals

et al. 2020

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The principle behind sustainable city movements is represented by the idea of “good living”, which is the possibility of having solutions and services that allow citizens to live in an easy, simple, and enjoyable way. Policies for urban quality play a central role in the slow cities manifesto, often suggesting the use of Information and Communication Technologies (ITC) in the development of interactive services for citizens. Among these, an interesting possibility is to offer citizens digital real estate consultancy services through the implementation of automated evaluation methods. An automated appraisal action—which is already complex in itself owing to the need to collect data in a consistent, standardized, but also differentiated way so as to require the adoption of real estate due diligence—collides on the operational level with the concrete difficulty of acquiring necessary data, much more so since the reference market is dark, atypical, and viscous. These operational difficulties are deepened by the epistemological nature of the appraisal discipline itself, which bases its methodology on the forecast postulate, recalling the need to objectify as much as possible the evaluation from the perspective of an intersubjective sharing argument. These circumstances have led, on the one hand, to the definition of internationally accepted uniform evaluation rules (IVS, 2017) and, on the other, to the testing of automated valuation methods aimed at returning computer-based appraisals (AVM). Starting from the awareness that real estate valuation refers essentially to information and georeferences, this paper aims to demonstrate how real estate appraisal analysis can be further improved through information technology (IT), directing real estate valuation towards objectivity in compliance with international valuation standards. Particularly, the paper intends to show the potential of combining geographic information systems (GISs) and building information models (BIMs) in automated valuation methods through the depreciated reproduction cost. The paper also proposes a BIM-GIS semi-automatic prototype based on the depreciated reconstruction cost through an experimentation in Rende (Italy).

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“…Following the non-agency mortgage crisis, numerous contributions have been offered in order to improve the efficiency and quality of an automated valuation methodology (AVM) dealing with emerging problems and different contexts. Spatial issues [29,30], evolution of AVM standards [31][32][33], multilevel models [34], fuzzy and rough set applications [35] and quantitative methods to define comparables are just some of the topics discussed.…”

Section: Literature Reviewmentioning

confidence: 99%

A Mass Appraisal Model Based on Market Segment Parameters

2017

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Abstract:The proposed evaluation scheme is a uni-equation model to evaluate properties of Mass Appraisal (MA) in terms of widespread availability of sample data. It all allows the use of statistical models and in the opposite conditions of the absence of data of comparable properties, the functions of similar market areas are known as well as the ones near to those for which you want to estimate the function. Of course, the accuracy of the evaluation increases with the amount of available data, with other equal conditions and evaluations carried out without data (but in the presence of other market information). It requires extra-statistical appraisal procedures involving a complete knowledge of the real estate market. However, such knowledge is also required in the MA performed by quantitative models with regard to the data sampling and performance monitoring process. The model considers micro-level characteristics of the properties and macro-level parameters of the real estate market segments. The appraisal model defines the prediction function with both the statistical models and estimation procedures. For this purpose, the model considers four specific situations: the construction of a statistical model operating with a sufficiently large sample of market prices; the construction of a prediction function operating with a very few number of market prices samples; in this situation, the appraisal function of market value is defined by using a sample of market prices referred to comparable properties, and these are few for statistical use but perfectly suitable to the appraisal process; the construction of a prediction function operating with only one market price; the construction of a prediction function operating in the absence of real estate data but with similar functions of market areas with other estimated proprieties. The presented model provides a uniform method of estimating the market value of properties (and fees), through the modular functions. The model studied is able to operate also with reduced information, considering the practical circumstances, the boundary conditions, the application precautions and the significance of the results.

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Automatic Research of the Capitalization Rate for the Residential Automated Valuation: An Experimental Study in Cosenza (Italy)

Cited by 5 publications

References 24 publications

Research of the Critical Capitalization Rate in Building Damage Appraisal

Research of the Critical Capitalization Rate in Building Damage Appraisal

Automated Valuation Methods through the Cost Approach in a BIM and GIS Integration Framework for Smart City Appraisals

A Mass Appraisal Model Based on Market Segment Parameters

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