The time frame for under construction appraisal.

[moh malekpour]

Moh,
Present value is function of how long it will take to start realizing the future benefits. Would you buy into a project, put yourself in a position where you would have to invest more money to finish the project – and have no idea when the project would be complete?

Steven,
The answer is no. but what present value of a building with its present condition has to to with its future value with its future condition if you do as is appraisal? Every thing has present value and future value and present value for present condition and present value for future condition and future value for future condition. You appraise it in as is condition at present value for its present condition. You can also appraise it at the present value for the future condition but it is not going to be as is, it is going to be subject to as if.

 

[Fred]

but what present value of a building with its present condition has to to with its future value with its future condition

People would price things differently on whether something looked like it would still be standing through the ages or it if looked like it was going to collapse any minute. Right? Doesn't that reflect the principles of substitution and anticipation?

 

[Bruce Lennick]

The fact that they haven't finished the project on time would not be your concern. Your reported value is of the date of inspection. When you go back for the final inspection, you are just saying that the project is finished and the value given at the time of the inspection is what it was.