Property Appraisals: Considerations Regarding the Income Approach – Its use and Possible Distortions in the Leasing Market

1
Feigelson Deutsch. S
Feigelson Deutsch. S
2
Rottmann. E
Rottmann. E
3
Silva
Silva

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GJMBR Volume 22 Issue C2

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This study analyzes the Income Approach -NBR 14653-4/2002, more specifically, in item 9.3when it proposes to “[…] identify the value of the enterprise based on the expectation of future results [… ]”. At this point, the property valuation protocol has been much discussed, especially in some lawsuits, due to the confirmed feeling that there is a lack of discretion when using, in a mistaken way, its dictates in properties not characterized as real estate-based, that is. that is, reaching real estate -land and/or buildings not produced/prepared for the lessor to exploit economically. The referred standard adds that: “[…] the value of the project will correspond to the present value of the projected cash flow, discounted at given rates […]”. What has been seen is that the widespread use of this approach presupposes that the lessee will use the property attached to an exotic type of partnership with the lessor. These valuation procedures, disconnected from reality, somehow deviate from NBR 14653-2/2011, when the ideal would be to use the Direct Comparative Method of Market Data, thus considering the value of the property in relation to the value of the properties similar in a given region.

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No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

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No ethics committee approval was required for this article type.

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Not applicable for this article.

Feigelson Deutsch. S. 2026. \u201cProperty Appraisals: Considerations Regarding the Income Approach – Its use and Possible Distortions in the Leasing Market\u201d. Global Journal of Management and Business Research - C: Finance GJMBR-C Volume 22 (GJMBR Volume 22 Issue C2): .

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Property appraisal process discussing income approach and potential distortions.
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GJMBR Volume 22 Issue C2
Pg. 29- 34
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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR-C Classification: DDC Code: 333.33220973 LCC Code: HD255
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v1.2

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April 21, 2022

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English

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This study analyzes the Income Approach -NBR 14653-4/2002, more specifically, in item 9.3when it proposes to “[…] identify the value of the enterprise based on the expectation of future results [… ]”. At this point, the property valuation protocol has been much discussed, especially in some lawsuits, due to the confirmed feeling that there is a lack of discretion when using, in a mistaken way, its dictates in properties not characterized as real estate-based, that is. that is, reaching real estate -land and/or buildings not produced/prepared for the lessor to exploit economically. The referred standard adds that: “[…] the value of the project will correspond to the present value of the projected cash flow, discounted at given rates […]”. What has been seen is that the widespread use of this approach presupposes that the lessee will use the property attached to an exotic type of partnership with the lessor. These valuation procedures, disconnected from reality, somehow deviate from NBR 14653-2/2011, when the ideal would be to use the Direct Comparative Method of Market Data, thus considering the value of the property in relation to the value of the properties similar in a given region.

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Property Appraisals: Considerations Regarding the Income Approach – Its use and Possible Distortions in the Leasing Market

Feigelson Deutsch. S
Feigelson Deutsch. S
Rottmann. E
Rottmann. E
Silva
Silva
Silva
Silva

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