|Yield Capitalization (Discounting)|
"Yield capitalization is a used to convert future benefits to present value, by discounting each future benefit typically a periodic income stream and reversion, into present value by discounting each future benefit at an appropriate yield rate, or by applying an overall rate (extracted using one of the yield methods) that explicitly reflects the investment's income pattern, value change, and yield rate." (from: The Appraisal of Real Estate, 13th ed., Appraisal Institute, Chicago, IL (2008). [emphasis added]
Simply stated, yield capitalization is a technique that converts the future benefits anticipated by a real estate investor into the present value of the real estate.
Course Learning Objectives
- To train professionals who are already familiar with the generally-accepted principles of income property appraising one technique for applying the income approach using a HP-12C financial calculator.
- To practice estimating the present value of a property by discounting its projected cash flow and reversion.
AQB's CAP and IDECC approved for 4 hours CE and includes numerous interactive exercises to complete.