The document details various property valuation concepts, including market value, book value, rateable value, and capitalized value. Market value fluctuates based on demand and supply, while book value decreases over time due to depreciation. It also explains the calculation of capitalized value based on net income and prevailing interest rates.

1. Chapter: VALUATION
Prepared by
Er. Rajan Vinayak
AP, CED
ESTIMATING & COSTING (BCIE1-629)
Department of Civil Engineering
BFCET

2. Market value: the market value of a property is the
amount which can be obtained at any particular time
from the open market if the property is put for sale.
The market value will differ from time to time according
to demand and supply. This value is changes from time
to time for various reasons such as change in industry,
change on fashion, means of transport, cost of material
And labour etc.
Department of Civil Engineering

3. Book value: Book value is the amount
shows in the account book after allowing
necessary depreciation. The book value of
property at a particular year is the original
cost minus the amount of depreciation
year. The end of the utility period of the
property the book value will be only scrape
value.
Department of Civil Engineering

4. Book value:
Department of Civil Engineering

5. Rateable value: Rateable value is the net annual
value of a property, which is obtained after
deducting the amount of yearly repairs from the
gross income.
Municipal and other taxes are charged at a
certain percentage on the rateable value of the
property.

6. Annuity: is the annual periodic payments for
repayments of the capital amount invested by a
party. Annuity is either paid at the beginning or
at end of each period of instalment.
Annuity Due- Payments continues for DEFINITE period
Deffered Annuity- Payment begins at some future date
after no of years
Perpetual Annuity- Continue for INDEFINITE period
Though Annuity- Amount may be paid in 12, 6 or 3
monthly installments

7. Capitalized Value of a Property
The capitalized value of a property is the amount of
money whose annual interest at the highest prevailing
rate of interest will be equal to the net income from the
property. To determine the capitalized value of a
property, it is required to know the net income from the
property and the highest prevailing rate of interest.
Capitalized Value = Net income x year’s purchase
@5% interest = 1000 Rs x 100/5 = 20000 Rs
@8% interest = 1000 Rs x 100/8 = 12500 Rs
Which means Higher the rate of interest, Capitalised
Value of built property goes down, then rent shall have
to go up.

8. Year’s purchase(Y.P):
The capitalize value which needs to be paid once for all
to receive a net annual income of Rs 1 by way of interest
at the prevailing rate of interest for an indefinite period or
for a fixed no. of days.
Example:-
If Rent = 10,000 Rs YP 4 years @ 8% = 3.3121
Capitalised value = 33,121 Rs
If Rent = 10,000 Rs YP 4 years @ 10% = 3.1699
Capitalised value = 31,699 Rs

9. Year’s purchase(Y.P):
Here i= rate of interest per annum
n= No of years

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