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Valuation and property management. Lecture notes: briefly, the most important

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Table of contents

1. Real estate (Real estate as an investment object. Types of real estate. Real estate market. Participants and sources of the real estate financing process. Advantages of investing in real estate. Mortgage lending. Mortgage as a way to secure obligations. Features of mortgage lending)
2. Real estate valuation (Factors influencing the value of real estate. Main types of real estate value. Basic principles of real estate valuation. Types of real estate valuation. Approaches to real estate valuation. Comparative approach. Cost approach. Income approach. Land valuation. Analysis of the best and most efficient use of land. Valuation land use efficiency Land valuation methods Real estate valuation report)
3. Determining the cost of invested capital based on the capitalization of income (Direct capitalization. Capitalization of income at the rate of return. Discounting cash flows. Forecasting cash flows from reversion. Determining the discount rate. Capitalization by calculation models. Capitalization of evenly changing income. Mortgage investment analysis)
4. Managing the process of investing and financing real estate (Criteria for the effectiveness of investment projects. Methods for analyzing investment projects. Risks in real estate financing. Criteria for making decisions on real estate financing. Credit consulting)

1.1. Real estate as an investment object

Real estate - land and all improvements permanently attached to it (buildings, structures, construction in progress).

In Russia, the term "immovable and movable property" first appeared in the legislation during the reign of Peter I in the Decree of March 23, 1714 "On the order of inheritance in movable and immovable property." Land, land, houses, factories, factories, shops were recognized as real estate. Real estate also included minerals located in the ground, and various structures, both towering above the ground and built under it, for example: mines, bridges, dams.

Economic reforms in Russia, the consolidation of property by property rights for individuals and legal entities, led to the need to divide property into movable and immovable (for more details, see Shevchuk D.A. Organization and financing of investments. - Rostov-on-Don: Phoenix, 2006; Shevchuk D.A. Fundamentals of banking - Rostov-on-Don: Phoenix, 2006; Shevchuk D.A. Banking operations - Rostov-on-Don: Phoenix, 2006).

Since 1994, according to Art. 130 of the Civil Code of the Russian Federation, "immovable things (real estate, real estate) include land plots, subsoil plots, isolated water bodies and everything that is firmly connected with the land, i.e. objects that cannot be moved without disproportionate damage to their purpose, including forests, perennial plantings, buildings, structures". Real estate also includes air and sea vessels subject to state registration, inland navigation vessels, and space objects.

Other property may also be classified as real estate. So, according to Art. 132 of the Civil Code of the Russian Federation, "an enterprise as a whole, as a property complex used for entrepreneurial activities, is recognized as real estate." Things that are not real estate, including money and securities, are recognized as movable property.

The following features of real estate can be distinguished:

- real estate cannot be moved without causing damage to the object;

- real estate is firmly connected with the land, not only physically, but also legally;

- durability of the investment object;

- each specific property is unique in terms of physical characteristics and in terms of investment attractiveness;

- real estate cannot be stolen, broken or lost under normal conditions;

- the cost of real estate is high, and its division into property shares is difficult, and in other cases impossible;

- Information about real estate transactions is often unavailable;

- the loss of consumer properties or the transfer of value in the production process occurs gradually as it wears out;

- the usefulness of real estate is determined by the ability to satisfy a specific human need for residential and industrial space;

- the possibility of a positive or negative impact of new construction on the cost of adjacent land, buildings;

- there is a tendency to increase the value of real estate over time;

- there are specific risks inherent in real estate as an investment object: the risk of physical damage under the influence of natural and man-made factors, the risk of accumulation of external and functional wear and tear, financial risk associated with the conditions for revising the rent;

- Strict government regulation of real estate transactions.

1.2. Property types

There are three main types of real estate: land, housing and non-residential premises.

The basic object of real estate is land.

Along with the division into types, real estate is classified according to a number of criteria, which contributes to more successful research of the real estate market and facilitates the development and application of methods for evaluating various categories of real estate and managing them.

There are the following forms of income from investing in real estate:

- increase in the value of real estate due to changes in market prices, the acquisition of new and development of old facilities;

- future periodic cash flows;

- income from the resale of the object at the end of the holding period.

The attractiveness of investing in real estate is explained by the following factors:

- at the time of the acquisition of real estate, the investor receives a package of rights, while many investment objects do not entail ownership rights;

- the safety of invested funds in general (under normal conditions, real estate cannot be lost or stolen) and inflation in particular (inflationary processes are accompanied by an increase in real estate prices and income from it);

- the ability to receive income from real estate in monetary terms and other beneficial effects of living, the prestige of owning a certain object, etc.

Investing in real estate has such positive features as the possibility of long-term use of the object and the preservation of capital.

1.3. Real estate market

The real estate market is a set of relations around operations with real estate: buying and selling real estate, mortgages, renting out real estate, etc.

The main segments of the real estate market: the land market, the housing market and the non-residential premises market.

Separately, there is a profitable real estate market, which is segmented according to the functional purpose of the objects:

- market of office objects;

- market of commercial objects;

- market of production and storage facilities;

- market of hotel services;

- the market of unfinished construction objects.

Depending on the legal rights to real estate, which are the subject of a transaction between the seller and the buyer, the real estate market is divided into markets for sale and rental.

In the sale and purchase market, in exchange for the corresponding equivalent, full ownership is transferred, including the right to dispose, while in the rental market, the object of the transaction is a partial set of rights, excluding the right to dispose.

The following features of the real estate market can be distinguished:

- locality;

- low interchangeability of objects;

- seasonal fluctuations;

- the need for state registration of transactions.

When financing real estate, three groups of costs are distinguished:

- the cost of maintaining the property in a functionally usable condition;

- annual tax on property ownership;

- high transaction costs in real estate transactions.

Fluctuations in demand and supply in the real estate market are slow, because in the presence of demand, an increase in the number of properties occurs over a long time period, determined by the construction period of the building. In the case of an excess of real estate, prices remain low for several years (for more details, see Shevchuk D.A. Buying a house and land: step by step. - M .: AST: Astrel, 2008).

The main factors affecting supply and demand:

- economic: the level of income of the population and business, the availability of financial resources, the level of rental rates, the cost of construction and installation works and building materials, tariffs for utilities;

- social: change in the number, population density, educational level;

- administrative: tax rates and zonal restrictions;

- ecological: susceptibility of the area where the property is located to droughts and floods, deterioration or improvement of the environmental situation.

Real estate is a financial asset, as it is created by human labor and capital investments. The acquisition and development of real estate is accompanied by high costs and, accordingly, the need to attract borrowed funds, etc., often arises. Therefore, the real estate market is one of the sectors of the financial market.

The financial market is a complex economic system that includes a set of institutions and procedures aimed at the interaction of sellers and buyers of all types of financial documents.

The real estate market is one of the most significant components of the financial market.

There is a close relationship between the financial market and the real estate market: the growth of investments in real estate revitalizes the real estate market, the fall curtails it. Economic instability holds back both Russian and foreign creditors and investors. State support is needed to intensify financing of investments in real estate.

1.4. Participants and sources of the real estate financing process

Traditionally, participants in the real estate financing process are divided into the following categories:

- federal and local authorities and administrations;

- credit and financial institutions;

- investors, etc.

Federal and local authorities and administrations provide economic and legal relations between participants in the real estate financing process. The state ensures compliance with the norms and rules related to the functioning of the real estate market; regulates issues of zoning, urban development and registration of property rights to real estate; establishes benefits or imposes restrictions (legislative restrictions, taxation features) on investments in real estate. In addition, the state acts as the owner of many real estate objects.

Financial institutions provide capital to investors who do not have sufficient funds.

Investors are individuals and legal entities (residents and non-residents) who purchase real estate and maintain it in a functional condition.

Investors can be divided into two types:

1) active - finance and engage in the construction, development or management of the facility;

2) passive - only finance the project without taking further part in it.

Currently, development has developed in the real estate market - a special type of professional activity in managing an investment project in the field of real estate, one of the tasks of which is to reduce the risks associated with real estate development. The developer is the organizer, whose activities can be divided into three stages:

1) analysis of the possibility of implementing the project: the state and trends of changes in legislation, consumer preferences, financial and economic conditions, prospects for the development of the region are taken into account;

2) development of a project implementation plan: the area of ​​the land plot required for the implementation of the project is determined, a location with the appropriate environment, communications is selected, and the project's effectiveness is assessed. Then the sources of financial resources are determined, a building permit is obtained, etc.;

3) implementation of an investment project: attracting financial resources, design and construction organizations, monitoring the progress of construction, renting or selling an object in whole or in parts.

Sources of capital investment financing: state funds, local budget funds (municipal), own financial resources of enterprises and individuals, attracted funds, investors' funds.

1.5. Benefits of investing in real estate

Investing in real estate that generates income is the most profitable. The attractiveness of acquiring income-generating real estate lies in the return on investment after repayment of operating expenses. However, in this case, the risk is higher due to the low liquidity of real estate and the length of the payback period for invested funds.

Methods of investing in the real estate market can be direct and indirect.

Direct - Acquisition of real estate at auction in accordance with a private contract, purchase with a leaseback.

Indirect - purchase of securities of companies specializing in real estate investments, investments in mortgages secured by real estate.

Investments in real estate, like investments in corporate securities, are long-term.

Advantages of investing in real estate over securities:

1. Unlike corporate securities, such as stocks, which pay quarterly dividends, real estate ownership provides the investor with monthly cash, as monthly rent payments lead to monthly payments to the investor.

2. The cash flow of income from real estate ownership (the difference between cash receipts from rent and property maintenance costs plus capital investments) is less dynamic than the cash flow of highly leveraged corporations:

- cash flow income of corporations depends on the volume of product sales, which are dependent on the daily decisions of consumers, and income streams from real estate are more stable because they are based on lease agreements;

- sources of corporate cash income may change over time, and sources of income from real estate are more predictable, since buildings are immovable, assets are fixed both physically and legally.

3. Corporate rates of return are generally lower than real estate. This is due to the fact that the intensive operation of real estate assets is comparable to most business areas. To recover the costs of fixed capital invested in real estate, a higher level of return is required, since the expected income to be received by the investor must exceed the costs of operating the property. The rate of return should be higher than when investing in financial assets, which should correspond to the higher risks of investing in real estate.

4. Investments in real estate are characterized by a greater degree of safety, security and the ability to control the investor than investments in shares.

The sources and amount of investment in real estate are influenced by:

- expected return on investment;

- bank interest rate;

- tax policy in general and in the investment sphere in particular;

- inflation rates;

- the degree of risk of investment in real estate.

Reasons for the attractiveness of investing in real estate in terms of inflation:

- rapid depreciation of money with insufficient reliability of their safety in credit institutions;

- frequent discrepancy between the bank rate and the level of inflation;

- limited more profitable areas of investment;

- residual affordability and ease of investment in housing;

- investing in real estate that generates income can, under these conditions, increase the rent, thereby preserving the invested funds.

On the other hand, in conditions of inflation, there are circumstances that encourage investment in other areas: real incomes are falling, it is difficult for an investor to predict the ratio between costs and expected benefits, it is more difficult to get a long-term loan at an acceptable interest rate, which leads to a lack of financial resources for potential buyers.

At the current stage of development of the Russian economy with high inflation rates, investment activity is subject to significant risks, which leads to a decrease in investment activity in the real estate market. The limited investment resources led to the process of curtailing construction in almost all sectors of the economy (for more details, see Shevchuk D.A. Real estate appraisal and property management. - Rostov-on-Don: Phoenix, 2007).

And yet the real estate market is attractive to potential investors for the following reasons:

- investments in real estate are characterized by a significant degree of safety, security and the ability to control the investor;

- at the time of the acquisition of real estate, the investor receives a package of rights, while most other investment objects do not entail the right of ownership;

- investing in real estate allows you to save money from inflation;

- the real estate market, which has a large size, is little mastered;

- investments in real estate are accompanied by an acceptable profitability of operations in this market.

Today in Russia, investment activity in the real estate market is reduced. Even the housing market, which is the most active segment of the real estate market, was not provided with appropriate credit and financial mechanisms that would support the effective demand of the population and make it possible to improve the living conditions of the population on a massive scale. The balance of interests of all participants in the real estate financing process is a necessary component of the normal functioning of the real estate market.

1.6. Mortgage credit lending

Under the "mortgage" understand the pledge of real estate as a way to secure obligations. The presence of a mortgage lending system is an integral part of any developed system of private law. The role of mortgages especially increases when the state of the economy is unsatisfactory, since a well-thought-out and effective mortgage system, on the one hand, helps to reduce inflation by drawing on temporarily free funds of citizens and enterprises, and on the other hand, helps to solve social and economic problems.

The emergence of mortgages. The first mention of the mortgage refers to the VI century. BC e. In Greece, a mortgage meant the debtor's liability to the creditor for certain land holdings. On the border of the land area owned by the debtor, when registering the obligation, a pillar was placed, called "mortgage".

The first acts on pledge that have come down to us in Russia date back to the period of the XNUMXth-XNUMXth centuries, and the legislative norms first appeared at the very end of the XNUMXth or the beginning of the XNUMXth century. in the Pskov Judicial Charter, in which, along with the oldest method of collection - personal - there is a collection of property.

At the end of XIX - beginning of XX centuries. the process of lending secured by land plots, which the borrower was going to acquire, was actively going on. This process developed with the assistance of peasant land banks, which were created in almost all provinces of Russia and contributed to the allocation of land to impoverished peasants.

From 1922 to 1961 In Russia, the Civil Code of the RSFSR, Art. 85 of which defined a pledge as a right of claim, which allows the creditor, in the event of the debtor's failure to fulfill the obligation, to receive priority satisfaction over other creditors at the expense of the value of the pledged property (without division into movable and immovable).

As such, due to various economic and legal obstacles, the institution of mortgage has not yet gained significant popularity in Russia, so it is regulated by a relatively small number of regulations.

In 1992, the Law of the Russian Federation "On Pledge" was adopted, which fixed the possibility of mortgages as a way to secure obligations. The Civil Code of the Russian Federation (Part I) clarified certain provisions on pledge (Articles 334-358). In Art. 340 it is stipulated that the mortgage of a building or structure is allowed only with simultaneous mortgage under the same agreement of the land plot on which this building or structure is located, or of a part of this plot that functionally provides the pledged object, or of the right to lease this plot or its corresponding part belonging to the pledgor. And in the case of a mortgage of a land plot, the right of pledge does not extend to the buildings and structures of the pledgor located or being built on this plot, unless otherwise stipulated in the contract.

Registration of real estate - the most important function of the state, without proper implementation of which a stable turnover of real estate is impossible, is regulated by the Federal Law of July 21.07.1997, XNUMX "On State Registration of Rights to Real Estate and Transactions with It". The actual implementation of the bank's rights under the mortgage is possible within the framework of the Law "On Enforcement Proceedings". Separate special rules, which, nevertheless, should be taken into account when concluding mortgage agreements, are scattered under the relevant laws.

In 1998, the Federal Law "On Mortgage (Pledge of Real Estate)" was adopted, according to which, under an agreement on pledge of real estate (mortgage agreement), one party - the pledgee, who is a creditor under an obligation secured by a mortgage, has the right to receive satisfaction of his monetary claims to the debtor under this obligation from the value of the pledged real estate of the other party - the mortgagor, predominantly over other creditors of the mortgagor, with exceptions established by law. The pledgor may be the debtor under an obligation secured by a mortgage, or a person not participating in this obligation (a third party). The property on which a mortgage has been established remains with the pledgor in his possession and use (Article 1).

A mortgage may also be established as security for an obligation under a loan agreement, under a loan agreement or other obligation, including an obligation based on the sale, purchase, lease, contract, other agreement, or damage, unless otherwise provided by federal law. 2) The mortgage agreement is concluded in compliance with the general rules of the Civil Code of the Russian Federation on the conclusion of agreements, as well as the provisions of the said Federal Law.

A mortgage is subject to state registration by justice institutions in the Unified State Register of Rights to Real Estate at the location of the property that is the subject of the mortgage and ensures the payment of the principal amount of the debt to the mortgagee or under a loan agreement or other obligation secured by a mortgage (for more details, see the book Shevchuk D.A. Mortgage: just about the complex. - M.: GrossMedia: ROSBUH, 2008).

With the introduction of the Law "On Pledge of Real Estate", a "mortgage" appeared as a freely tradable security on the market. A mortgage bond is a registered security certifying the owner's right to receive performance on a monetary obligation secured by a mortgage on the property specified in the mortgage agreement, without presenting other evidence of the existence of this obligation, and the very right of pledge to the property specified in the mortgage agreement. After the state registration of a mortgage by the body carrying out this registration, the mortgage bond is issued to the original mortgagee and transferred by means of an endorsement. The mortgage simplifies the transfer of mortgage rights by the bank - it is transferred by making another endorsement with subsequent state registration. Another positive characteristic of a mortgage is that the mortgage itself can be pledged.

1.6.1. Mortgage as a way to secure obligations

Often, the term "mortgage" means mortgage lending, but "mortgage" has an independent meaning - a pledge of real estate as a way to secure obligations.

According to Art. 5 of the Law "On Mortgage (Pledge of Real Estate)" under a mortgage agreement, real estate specified in Art. 130 of the Civil Code of the Russian Federation, the rights to which are registered in the manner established for state registration of rights to real estate, including:

- land plots, with the exception of land plots specified in Art. 63 of this Federal Law;

- enterprises, buildings, structures and other real estate used in entrepreneurial activities;

- residential buildings, apartments and parts of residential buildings and apartments, consisting of one or more isolated rooms;

- dachas, garden houses, garages and other consumer buildings;

- air and sea vessels, inland navigation vessels and space objects.

If we are talking about housing mortgages, then the subject of collateral must meet the following requirements: have a kitchen and a bathroom separate from other apartments or houses (i.e., communal apartments are not accepted as collateral); be connected to electric, steam or gas heating systems that provide heat to the entire area of ​​\u2008b\uXNUMXbthe dwelling; be provided with hot and cold water supply in the bathroom and kitchen; have plumbing equipment, doors, windows and a roof in good condition (for apartments on the top floors). The building in which the subject of pledge is located must meet the following requirements: not be in an emergency condition; not to be registered for a major overhaul; have a cement, stone or brick foundation; have metal or reinforced concrete floors; the number of storeys of the building should not be less than three floors (for more details, see Shevchuk D.A. An apartment on credit without problems. - M .: AST: Astrel, XNUMX).

The mortgage agreement must specify the subject of the mortgage, the results of the assessment of its value, the essence and term of performance of the agreement secured by the mortgage, as well as the right by virtue of which the property that is the subject of the mortgage belongs to the pledgor. The subject of the mortgage is determined in the contract with an indication of its name, location and a description sufficient for identification purposes. The appraisal of the subject of mortgage is determined in accordance with the Law "On appraisal activities in the Russian Federation" by agreement between the mortgagor and the mortgagee.

The mortgage agreement must be notarized and subject to state registration, from the moment of which it comes into force. Mortgage is subject to state registration by institutions of justice in the Unified State Register of Rights to Real Estate at the location of the property that is the subject of mortgage, in the manner prescribed by the Federal Law on State Registration. rights to real estate and transactions with it. A loan agreement secured by a mortgage can be concluded after the registration of the mortgage agreement, and the right of pledge arises from the moment the loan agreement is concluded, and the borrower does not risk anything if the loan agreement is not concluded. Due to the fact that the legislation allows multiple subsequent pledge of property already encumbered with a mortgage, an appropriate prohibitive condition should be included in each mortgage agreement (for more details, see Shevchuk D.A. Loans to individuals. - M .: AST: Astrel, 2008).

The mortgage secures the payment to the mortgagee of the principal amount of the debt under the loan agreement or other obligation secured by the mortgage in full or in the part provided for by the mortgage agreement. A mortgage established to secure the execution of a loan agreement subject to the payment of interest also ensures the payment to the creditor of the interest due to him for the use of the loan and the payment to the pledgee of the amounts due to him:

- in compensation for losses and/or as a penalty (fine, penalty fee) due to non-fulfillment, delay in fulfillment or other improper fulfillment of an obligation secured by a mortgage;

- in the form of interest for the illegal use of other people's funds provided for by a mortgage-secured obligation or by the Federal Law, Art. 393 of the Civil Code of the Russian Federation (it is difficult to collect interest from an individual for using other people's funds, since in a lawsuit it is necessary to prove that the citizen had the opportunity to pay off the debt, but did not return the funds he had and used them differently, but there are no such practical developments yet) ;

- in reimbursement of legal costs and other expenses caused by foreclosure on the pledged property;

- in reimbursement of expenses for the sale of mortgaged property.

Unless otherwise provided by the agreement, the mortgage secures the pledgee's claims to the extent that they exist by the time they are satisfied at the expense of the pledged property. The alienation of the pledged property by the owner is possible only with the consent of the bank. The Bank may foreclose on the pledged property in order to satisfy its claims at the expense of this property, caused by non-fulfillment or improper fulfillment of the obligation secured by mortgage, in particular, non-payment or late payment of the amount of the debt in full or in part. For example, in case of violation of the terms for making periodic payments more than three times within 12 months. Recovery is usually made by court order.

The rules of the Law "On Mortgage (Pledge of Real Estate)" apply to the pledge of unfinished real estate if it is being built on a land plot allocated for construction in accordance with the procedure established by law.

Allocation of pledge of real estate in a separate category, called "mortgage", due to the peculiarities of real estate. The advantages of real estate as an object of collateral in relation to other objects of collateral are as follows:

- the value of the mortgaged property may increase in proportion to the rate of inflation;

- the real danger of losing property (especially housing in case of housing mortgage lending) is a good incentive for the debtor to fulfill his obligations;

- the possibility of using it as collateral if the loan is long-term and significant in amount, since the property is durable and its value is high;

- an increase in the value of real estate can be predicted with sufficient certainty, which is impossible when using, for example, consumer goods as collateral.

A long-term loan can be granted on security with the transfer to the pledgee of the pledged property: precious metals and products made from them, secured by highly reliable securities, the price of which is particularly stable. However, in world practice, the vast majority of long-term loans are secured by real estate. Mortgage may become the most priority way of ensuring the fulfillment of obligations in Russia as well.

1.6.2. Features of mortgage lending

A mortgage loan is a loan secured by certain real estate. Mortgage lending is the provision of a loan secured by real estate. Creation of an effective system of mortgage lending is possible on the basis of the development of primary and secondary mortgage capital markets.

The primary mortgage capital market consists of lenders who provide loan capital and investor borrowers who buy real estate for investment or commercial use.

The secondary market covers the process of buying and selling mortgage bonds issued in the primary market. The main task of the secondary mortgage capital market is to provide primary lenders with the opportunity to sell the primary mortgage, and use the proceeds to provide another loan on the local market.

The advantage of mortgage lending is that if the borrower does not repay the loan, the lender has the right to dispose of the property at its discretion. Due to the fact that real estate is durable and its price is quite stable, the lender has low fears of loan default and there are grounds for long-term diversion of financial resources.

Obtaining a mortgage loan is associated with the need to fulfill obligations under a loan agreement. Therefore, before obtaining such a loan, a potential borrower needs to analyze:

- is there enough money to make a down payment for an apartment and to cover the costs associated with the transaction for the sale of an apartment (notarization of the contract, fee for registering the contract in the State Register), conclusion of insurance contracts;

- whether there will be funds to maintain the necessary standard of living after making periodic payments under the loan agreement;

- whether a drop in income is expected during the loan period, is there a prospect to quickly find another job in the event of termination of the existing one, with payment not lower than the previous one;

- whether there is a continuous work experience for the last 2 years and what are the reasons for dismissal and breaks in work, and whether current obligations related to housing are fulfilled in a timely manner: payment for utilities, telephone, electricity (checked by the bank);

- whether there are assets in the form of movable or immovable property (cars, garage, cottage, other apartment) that can be used as additional security.

The main problem of mortgage lending is the lack of long-term financial resources. One of the sources of long-term funds are the deposits of private investors. But at present, the population's confidence in banks in general and in commercial ones, especially, has been undermined. The financial and economic crisis of 1998 led to a significant decrease in the real incomes of the population, the depreciation of savings, and an outflow of private deposits to the Savings Bank. Another problem is the assessment of the solvency of a potential borrower, based on his real income. Due to the excessive tax burden, the share of the shadow sector in the economy is large, so the official income of potential borrowers is not high, which makes it difficult for commercial banks to make decisions on loans. A well-thought-out state tax policy in mortgage lending to the population will make it possible to bring real incomes out of the "shadow". But tax laws cannot change quickly.

The valuation of the subject of mortgage is carried out in accordance with the Law "On valuation activities in the Russian Federation" by agreement between the mortgagor and the mortgagee. This chapter briefly outlines the basics of assessing the market value of real estate.

2. Real estate appraisal

2.1. Factors affecting the value of real estate

There are four factors that affect the value of real estate.

1. Demand - the quantity of a given product or service that finds solvent buyers on the market. The biggest potential demand is in the housing market.

2. Utility - the ability of property to satisfy some human needs. Utility stimulates the desire to acquire a certain thing. The usefulness of housing is the comfort of living. For an investor operating in the real estate market, a land plot without restrictions on use and development will have the greatest utility.

3. Scarcity - limited supply. As a rule, with an increase in the supply of a certain product, prices for this product begin to fall, with a decrease in supply, they rise.

4. The possibility of alienability of objects is the possibility of transferring property rights, which allows real estate to pass from hand to hand (from seller to buyer), that is, to be a commodity. Previously, land in Russia was a single state property, so land was not considered a commodity.

Thus, value is not a characteristic inherent in real estate in itself: the presence of value depends on the desire of people, it is necessary to have purchasing power, utility and relative scarcity.

2.2. Main types of real estate value

Several types of value correspond to different purposes of real estate valuation.

The market value of the appraised object is the most probable price at which the appraised object can be alienated on the open market in a competitive environment, when the parties to the transaction act reasonably, having all the necessary information, and any extraordinary circumstances are not reflected in the value of the transaction price.

To determine the market value, it is impossible to accept the sales prices of similar objects without additional analysis, since the transaction price does not characterize the motives of the seller and the buyer, the absence or presence of any external influences. The market value of real estate can only be determined if the following conditions of an equilibrium transaction are present:

- the market is competitive and provides a sufficient choice of property for the interaction of a large number of buyers and sellers;

- the buyer and the seller are free, independent of each other, well informed about the subject of the transaction and act only in order to maximize their own interests - to increase income or better satisfy needs;

- exposition period of the object of evaluation.

The investment value is the highest price that an investor can pay for a property, given the expected return (utility, convenience) of this investment project. Investment and market values ​​coincide only when the expectations of a particular investor are typical for this market (for more details, see Shevchuk D.A. Organization and financing of investments. - Rostov-on-Don: Phoenix, 2006; Shevchuk D.A. Fundamentals of banking affairs. - Rostov-on-Don: Phoenix, 2006; Shevchuk D.A. Banking operations. - Rostov-on-Don: Phoenix, 2006).

The liquidation value of the appraisal object is the value of the appraisal object if the appraisal object must be alienated within a period less than the usual exposition period for similar objects. It is usually calculated when the object is forced to be sold. Due to the limitation of the sale period, which is not enough to familiarize all potential buyers with the object put on the market, the liquidation value may be significantly lower than the market value. It is determined, as a rule, during the liquidation of the enterprise by decision of the owner or a judicial authority. Represents the amount of cash that could actually be received from the sale of an entity's assets, regardless of their carrying value.

Utilization value of the appraised object - the value of the appraised object, equal to the market value of the materials it includes, taking into account the costs of disposing of the appraised object.

The value of the appraisal object for taxation purposes is the value of the appraisal object, determined for the calculation of the tax base and calculated in accordance with the provisions of regulatory legal acts (including the inventory value). It can be based on the market value, on the cost of reproducing the object, or calculated according to the normative methodology without the involvement of specialist experts.

The special value of the object of appraisal is the value, for the determination of which the appraisal agreement or the regulatory legal act stipulates conditions that are not included in the concept of market or other value specified in the appraisal standards that are mandatory for appraisal activity subjects. The following types of value can be distinguished:

the cost of an operating enterprise - the cost of a single property complex, determined in accordance with the results of the functioning of the established production. At the same time, the assessment of the value of individual objects of the enterprise consists in determining the contribution that these objects make as integral components of the operating enterprise;

insurance cost - the cost of full compensation for damage to property in the event of an insured event. It is calculated in accordance with the methods used by insurance companies and government agencies to calculate the amount for which destructible elements of an object can be insured. The costs of restoring the elements of the object that are at risk of destruction and destruction are taken into account.

2.3. Basic principles of real estate valuation

The basic principles of real estate valuation can be divided into 4 categories.

The best and most efficient use (NNEI) principle is based on determining the value of real estate if the property is used in the best, most efficient way, even if the current use of the property is different.

The most probable and profitable use of the property at the time of valuation provides the highest current value of the property.

Condition of the building (the need for major repairs is taken into account by the buyer when discussing the amount of the transaction; cosmetic repairs do not significantly affect the value of the property).

Thus, a variety of different real estate transactions correspond to several types of value. Depending on the needs of real estate market participants, the value of different types of value of the same object can differ significantly. The most common appraisal of the market value of real estate.

The value of real estate objects is influenced by a significant number of economic factors. The principles of real estate appraisal make it possible to take into account the most significant of them.

There are several limitations for the NNEI version of the property being assessed:

- maximum efficiency;

- financial justification;

- physical feasibility;

- compliance with the law.

The maximum efficiency is determined by discounting the future returns of the alternative use cases, taking into account the risk of the investment.

Financial feasibility is understood as the justification for the expediency of financing an investment project, which reflects the ability of this project to provide income sufficient to reimburse investors' expenses and receive the expected return on invested capital.

The justification for the technological and physical feasibility of the NNEI option is based on an analysis of the ratio of quality, costs and project implementation time, the likelihood of natural disasters, the availability of transport, and the ability to connect to public amenities. To establish the compliance of the use case with the legislation, it is necessary to analyze building and environmental standards: limiting the number of storeys, a ban on construction in a given place, zoning, prospects for the development of the city and the region, negative moods of the local population, fire safety, etc.

The NNEI principle is important in the analysis of a land plot. If the current use of the land differs from the best and most efficient, the value of the vacant land may exceed the value of the existing improvements on it, and a decision may be made to demolish them in order to use the site in an optimal way. For example, it is desirable to give a plot with an individual house in a commercial development area for such development.

If the current use of the land plot is different from the best use case, but the value of the buildings and structures on it exceeds its value, then the current use will continue until the value of the land, under the condition of its best use, does not exceed the value of the property in the current use.

The results of the analysis of the best and most efficient use are taken into account when determining the value of real estate, when choosing a construction and reconstruction option, and when analyzing investment projects.

The contribution principle is based on measuring the value of each element that it contributes to the total value of the object. The influence of both the presence of a contribution (element) and its absence on the change in the value of the property is taken into account.

When analyzing investment projects and assessing the value of real estate, it is necessary to take into account the possibility of making improvements that will increase the value of the object. At the same time, the income received as a result of additional improvements should exceed the amount of invested funds aimed at creating these improvements.

The principle of marginal productivity is that successive improvements will be accompanied by an increase in the value of the object, exceeding the cost of their creation, until the point of maximum productivity is reached, after which the costs of creating additional improvements will not be fully offset by the increase in the cost of the object.

For example, updating the interior of a cafe will attract additional visitors, which will increase the income from the facility. The subsequent even higher-quality expensive repair of this premises, which is in good condition, may not affect the growth of income. Therefore, the cost of the second repair will not be compensated.

Thus, the principle of marginal productivity is based on the ratio of the costs of additional improvements to the growth in the value of the object and the increase in income from it as a result of the measures taken. An increase in the volume of investments in the development of production will be accompanied by an increase in profit growth only up to a certain point, after which the profit growth rate will begin to decline.

The principle of balance is based on the fact that the more harmonious and balanced the elements of the object, the higher its value in the market. For example: a residential building with a good layout, with a well-thought-out communication system, has a higher cost than an object whose elements are less balanced; the cost of a restaurant with a spacious hall will be higher than the cost of a similar restaurant, in which a narrow elongated room is equipped to receive visitors.

In accordance with the principle of balance, one should also take into account the number of hotels, restaurants, trade enterprises in the same area.

The balance of the elements of the object is determined on the basis of market requirements. An imbalance in the timing and volume of investment with the timing of construction can lead to a "freeze" of funds or, if there is a shortage, to a "freeze" in construction. Lack of improvements or congestion of land can lead to a decrease in its value.

The principle of utility is based on the fact that a real estate object, along with greater utility for the user, also has a greater value in the market. Thus, the sales prices of apartments in brick houses are higher than in panel ones, since they have higher sound and heat insulation, and the walls "breathe".

The utility of real estate for income generation is expressed as a stream of income. Income can be received as a result of using the object as a store, warehouse, parking lot, etc.

The principle of substitution stated that an informed buyer in an open market would not pay more for a property than for an object of similar utility, profitability, or the cost of building a similar object in an acceptable time frame. If there are several properties on the market of the same utility for the consumer, then the objects with the lowest price will be in the greatest demand.

The buyer has options to choose from, and therefore the cost of a particular object will be affected by the availability of analogues or the value of the cost of their creation within an acceptable timeframe. The choice of the investor will be influenced by the value of objects of similar yield offered on the market, which are an alternative investment opportunity. For example, instead of three cheap car parks in a sparsely populated area, an entrepreneur can purchase one expensive car park in a central city for a similar return on investment.

The expectation principle is based on the fact that the value of real estate is influenced by the expected future benefits of owning an object. The expectations associated with income-generating properties are expressed in the expected return on investment from income streams from the use and future resale of the property.

The expectation of future benefits is expressed in monetary terms, while the adjustment to the current value of the object can be either positive or negative. The economic downturn, lack of policing and the prevailing negative public opinion may lead potential buyers to refuse to purchase real estate in the area. The expected construction of a metro station increases the value of adjacent residential buildings without physically changing them.

So, this principle is based on the attractiveness of the future benefits of owning a property: the more positive expectations, the higher the value of real estate.

The principle of external influence is based on taking into account changes in the value of real estate caused by the influence of changing environmental factors.

The main external factors affecting the value of real estate:

- economic: the level of income of the population and business, proximity to the centers of industrial and business activity, the availability of financial resources, the level of rental rates, the cost of construction and installation works and building materials, tariffs for utilities;

- political: state and tendencies of changes in legislation;

- social: changes in the number, population density, educational level;

- administrative: tax rates and zonal restrictions;

- environmental: exposure of the real estate area to droughts and floods, deterioration or improvement of the environmental situation.

The principle of change is based on taking into account changes corresponding to life cycles, which are inherent both in specific objects and real estate markets, and in cities, and in society as a whole. There are four cycles of life:

1) growth - a period of increasing incomes of the population and income from real estate, the rapid development of the industry, the city;

2) stability - a period of equilibrium, which is characterized by the absence of a visible change in the level of income or losses;

3) decline - a period of social instability and a decrease in demand for real estate, a decline in production;

4) renewal - a period of renewal and revival of market demand, the formation of a region, etc.

The cycle in which an individual property, area or society as a whole is located must be taken into account by the appraiser in the assessment process.

The principle of competition is based on the fact that market prices are set at a certain level, taking into account competition.

The principle of supply and demand is based on determining the value of an object by the ratio of supply and demand in the real estate market.

Demand and supply are influenced by such factors as the level of income, changes in the size and tastes of the population, the amount of taxes, the availability of financial resources, the size of the loan rate, etc.

The principle of conformity is based on the fact that the property reaches its maximum value in the environment of compatible harmonizing objects with a compatible land use. The use of the land must meet the existing standards of the area in which the property is located. New construction should be in the prevailing style.

The homogeneity of objects in the area maintains their value at a certain level. For example, the presence of old individual houses next to expensive residential buildings will lead to a decrease in the price of luxury real estate.

In general, the application of the principles of real estate valuation makes it possible to take into account the most significant factors affecting its value, and helps to bring the results as close as possible to the real economic reality.

2.4. Types of real estate appraisal

Real estate appraisal can be mass and individual.

Mass real estate valuation is the valuation of a large number of real estate objects on a specific date using standard methods and statistical analysis. This unifies the procedure for evaluating a large number of objects.

During the mass assessment, at the final stage, the model used for calculations is checked and the quality of the results obtained is controlled.

At the same time, the results obtained using the mass valuation model are compared with real sales prices and the deviations of the valuation level for each group of similar objects are evaluated.

An individual real estate appraisal is an appraisal of a specific property on a specific date. It is necessary to protect the results of the assessment in courts, to determine the value of special-purpose objects, etc.

An individual appraisal is carried out in several stages, united in the concept of "appraisal process", at the final stage of which the results obtained using different approaches to real estate appraisal are harmonized.

The mass assessment is approximate, and the individual assessment is exact, obtained as a result of a thorough analysis of real data on analogues of the object of assessment. Further in the training manual, the mechanisms of individual real estate valuation will be considered.

The real estate appraisal process consists of stages performed sequentially by a specialist appraiser to determine its value.

At the stage "Identification of the problem" the statement of the problem that needs to be solved is carried out:

- the object of assessment is described on the basis of relevant legal documents confirming the rights to real estate;

- Establishment of property rights associated with the object;

- the date of the appraisal is set - the calendar date, as of which the value of the appraisal object is determined;

- the objectives of the assessment of the object are indicated;

- the type of value is established, which must be determined in accordance with the goal;

- limiting conditions are formulated - statements in the report that describe obstacles or circumstances that affect the valuation of the property.

At the stage "Preliminary inspection and evaluation plan" it is determined what data are necessary and sufficient for the analysis of the object, the sources of their receipt are established; personnel specializing in the assessment of a given class of objects is selected; an appraisal work plan is drawn up and an agreement is concluded in writing between the appraiser and the customer.

The contract does not require notarization and must contain the grounds for concluding the contract, the type of the appraisal object, the type of value (values) of the appraisal object to be determined, the monetary reward for the appraisal of the appraisal object, information about the appraiser's civil liability insurance, an exact indication of the appraisal object (objects), information on whether the appraiser has a license to carry out appraisal activities and the period for which this license has been issued.

An appraisal of an object can be carried out by an appraiser only if the requirement for the independence of an appraiser, provided for by the legislation of the Russian Federation on appraisal activities, is observed. If this requirement is not complied with, the appraiser is obliged to inform the customer about this and refuse to conclude an appraisal contract. When concluding an agreement, the appraiser is obliged to provide the customer with information about the requirements of the legislation of the Russian Federation on appraisal activities: on the procedure for licensing appraisal activities, the appraiser's obligations, appraisal standards, requirements for an appraisal agreement. The fact of providing such information should be recorded in the valuation agreement.

At the stage "Data collection and verification", the evaluator collects and processes the following information and documentation:

- title documents, information about the encumbrance of the object of assessment with the rights of other persons;

- accounting and reporting data related to the object of assessment;

- information on the technical and operational characteristics of the object of assessment;

- information necessary to establish the quantitative and qualitative characteristics of the appraisal object in order to determine its value, as well as other information related to the appraisal object.

The appraiser determines and analyzes the market to which the appraisal object belongs, its history, current market conditions and trends, as well as analogues of the appraisal object and justifies their choice.

The data collected and analyzed by the evaluator can be divided into general and special. General data includes information on economic, social, state-legal, environmental factors that significantly affect the value of the appraisal object. Special data includes information about the property being valued and its analogues: information about the rights to the object, determining the compliance of the method of use with existing legislation, the characteristics of the building itself and the land plot on which it is located.

The next step in the assessment process is an analysis of the best and most efficient use of both the already developed land and the proposed vacant land. Based on the analysis carried out, its value is determined.

The stage "Applying valuation approaches" includes determining the value of the object using traditional valuation approaches. When conducting an appraisal, the appraiser is obliged to use cost, comparative and income approaches to appraisal, independently determining specific appraisal methods within each of the appraisal approaches.

The appraisal method is understood as a method of calculating the value of the appraised object within the framework of one of the appraisal approaches.

Then the obtained results are coordinated. "Agreement on the valuation result" is the receipt of the final valuation of the property based on the results of applying various approaches to valuation. As a rule, one of the approaches is considered basic, the other two are necessary to correct the results obtained. This takes into account the significance and applicability of each approach in a particular situation. Due to the underdevelopment of the market, the specificity of the object or the lack of available information, some of the approaches in a particular situation cannot be applied.

Then, taking into account all significant parameters, based on the expert opinion of the appraiser, the final value of the value of the object is established. This value must be expressed in rubles as a single value, unless otherwise provided in the valuation agreement. The final value of the value of the appraisal object indicated in the appraisal report drawn up in the manner and on the basis of the requirements established by the Federal Law "On appraisal activities in the Russian Federation", appraisal standards and regulations on appraisal activities of the authorized body for monitoring appraisal activities in the Russian Federation Federation, may be recognized as recommended for the purposes of making a transaction with the subject of appraisal, if no more than 6 months have passed from the date of drawing up the appraisal report to the date of the transaction with the subject of appraisal or the date of submission of the public offer.

At the final stage, an appraisal report is drawn up - a document containing the rationale for the appraiser's opinion on the value of the property. When compiling the appraisal report, the appraiser is obliged to use information that ensures the reliability of the appraisal report as a document containing information of probative value.

So, the assessment includes several stages:

- establishment of quantitative and qualitative characteristics of the object of assessment;

- analysis of the market to which the object of assessment belongs;

- the choice of the method or methods of assessment within each of the approaches to the assessment and the implementation of the necessary calculations;

- generalization of the results obtained within the framework of each of the approaches to the assessment, and the determination of the final value of the value of the object of assessment;

- drawing up and transfer to the customer of the assessment report.

When deciding whether to finance investments in real estate, the results obtained using the income approach are considered to be the most significant.

2.5. Approaches to real estate valuation

2.5.1. Comparative approach

The comparative approach to valuation is a set of valuation methods based on a comparison of the object of valuation with its analogues, in respect of which there is information on the prices of transactions with them.

Conditions for applying the comparative approach:

1. The object must not be unique.

2. Information must be comprehensive, including the conditions for making transactions.

3. Factors influencing the value of comparable analogues of the property being valued must be comparable.

Basic requirements for analogue:

- the analogue is similar to the object of assessment in terms of the main economic, material, technical and other characteristics;

- similar terms of the transaction.

The comparative approach is based on the principles:

- substitutions;

- balance;

- supply and demand.

Stages of the comparative approach:

- market research;

- collection and verification of the reliability of information on offered for sale or recently sold analogues of the object of evaluation;

- comparison of data on selected analogues and the object of assessment;

- adjustment of sales prices of selected analogues in accordance with the differences from the object of assessment;

- Establishing the value of the appraisal object.

An adjustment to comparable sales is necessary to determine the final value of the property being valued. Calculation and adjustments are made on the basis of a logical analysis of previous calculations, taking into account the significance of each indicator. The most important is the precise determination of the correction factors.

Advantages of the comparative approach:

1. The final cost reflects the opinion of typical sellers and buyers.

2. Sales prices reflect changes in financial conditions and inflation.

3. Statistically justified.

4. Adjustments are made for differences in the compared objects.

5. Relatively easy to use and gives reliable results.

Disadvantages of the comparative approach:

1. Sales differences.

2. Difficulty in collecting information on practical sales prices.

3. Difficulty in collecting information about the specific terms of the transaction.

4. Dependence on market activity.

5. Dependence on market stability.

6. Difficulty reconciling data on significantly different sales.

2.5.2. Cost approach

The cost approach is a set of valuation methods based on determining the costs necessary to restore or replace the object of assessment, taking into account accumulated depreciation. It is based on the assumption that the buyer will not pay more for the finished object than for the creation of an object of similar utility.

When applying this approach, the costs of the investor, not the contractor, are taken into account.

This approach is based on the principle of substitution.

Information needed to apply the cost approach:

- wage level;

- the amount of overhead costs;

- equipment costs;

- profit margins for builders in a given region;

- market prices for building materials.

Stages of the cost approach:

- calculation of the cost of the land plot, taking into account the most efficient use (Cz);

- calculation of costs for new construction of buildings being assessed (SNS);

- calculation of accumulated wear (In):

- physical wear and tear - wear associated with a decrease in the performance of an object as a result of natural physical aging and the influence of external adverse factors;

- functional wear - wear due to non-compliance with modern requirements for such objects;

- external depreciation - depreciation as a result of changes in external economic factors;

- calculation of the cost of improvements, taking into account the accumulated wear: Su=Sns-Ci;

- determination of the final cost of real estate: Szp = Sz + Su.

Advantages of the cost approach:

1. When evaluating new objects, the cost approach is the most reliable.

2. This approach is appropriate and/or the only possible one in the following cases:

- analysis of the best and most efficient land plot;

- feasibility study of new construction and improvements;

- assessment of public-state and special facilities;

- valuation of objects in inactive markets;

- valuation for insurance and taxation purposes.

Disadvantages of the cost approach:

1. Costs are not always equivalent to market value.

2. Attempts to achieve a more accurate assessment result are accompanied by a rapid increase in labor costs.

3. Inconsistency between the costs of acquiring the property under appraisal and the costs of new construction of exactly the same object, since accumulated depreciation is deducted from the cost of construction during the assessment process.

4. Problematic calculation of the cost of reproduction of old buildings.

5. Difficulty in determining the amount of accumulated wear and tear of old buildings and structures.

6. Separate assessment of the land plot from buildings.

7. Problematic evaluation of land plots in Russia.

2.5.3. income approach

The income approach is based on the fact that the value of real estate in which capital is invested must correspond to the current assessment of the quality and quantity of income that this property is capable of bringing.

The income approach is a set of methods for assessing the value of real estate based on determining the current value of the expected income from it.

The main prerequisite for calculating the value of this approach is the lease of the property. Capitalization of income is carried out to convert future income from real estate into current value.

Capitalization of income is a process that determines the relationship between future income and the current value of an object.

Basic income approach formula (IRV - formula):

V=I/R,

where V is the value of the property,

I - the expected income from the property being valued. Income usually refers to the net operating income that real estate is capable of bringing in for a period

R - the rate of return or profit - is the ratio or rate of capitalization.

Capitalization ratio - the rate of return, reflecting the relationship between income and the value of the object of assessment.

There are two types of capitalization:

- direct capitalization;

- capitalization of income according to the rate of return on capital.

With direct capitalization, two quantities are considered: annual income and the capitalization rate.

The capitalization rate is the ratio of the market value of the property to the net income it brings.

Expected income is determined by analyzing income during the period of ownership of the property.

Discount rate - the rate of compound interest, which is applied when recalculating at a certain point in time the value of cash flows arising from the use of property.

Stages of income approach:

1. Calculation of the sum of all possible receipts from the object of assessment.

2. Calculation of the actual gross income.

3. Calculation of costs associated with the object of assessment:

- conditionally constant;

- conditional variables (operational);

- reserves.

4. Determining the amount of net operating income.

5. Convert expected returns to present value.

2.6. Land valuation

It is believed that the land has a value, and the rest are improvements, they add a contribution to the value. A typical property consists of land and buildings. It is necessary to distinguish between the terms "land" and "land".

A land plot is understood as a part of the earth's territory, which is equipped and ready for use for various purposes.

Improvements made to create the site:

- external: arrangement of streets, sidewalks, drainage and engineering networks;

- internal: planning, landscaping, asphalting, installation of outlets for connecting engineering networks, communication communications, etc.

When evaluating a land plot, it is necessary to take into account the set of rights associated with it. Common rights requiring assessment:

1) full ownership - the possibility of using a plot free from tenants in any legal way;

2) the right to lease - the possibility of owning a land plot under a lease agreement.

The value of the lease rights is the amount that a potential buyer is willing to pay for the right to own a given site under a lease agreement in order to benefit from this ownership. The valuation of lease rights is used when determining the sale price of the right to lease a land plot, when determining the value of the object of which the leased land plot is a part, and when assessing the damage from the termination of a lease agreement.

2.6.1. Analysis of the best and most efficient use of land

When evaluating a land plot, it is necessary to determine the option for its best and most efficient use (NNEI), which is determined by the interaction of a number of factors.

The NNEI analysis includes the study of alternative options for the use (development, development) of a land plot and the choice of the optimal one. This takes into account the prospects of the location, the state of market demand, the cost of development, the stability of expected income, etc.

When assessing the value of an object consisting of a land plot and buildings, great importance is attached to the analysis of the NNEI, firstly, the alleged vacant land plot and, secondly, the land plot with existing improvements.

An analysis of a supposed vacant land plot is a necessary step in determining its value, and it is based on establishing the most profitable option for using the land.

An analysis of a land plot with existing improvements involves a decision to demolish, modernize or preserve the improvements existing on the land plot in order to ensure maximum profitability of the object.

The probable and most profitable use of the site provides its highest value. Use cases must be legal, physically feasible, and cost-effective.

The optimal use of land is determined by the following factors:

1) location - a factor that has a major impact on the cost of a land plot (taking into account the prospects of the location, transport accessibility, the nature of the environment);

2) market demand - a factor that reflects the ratio of supply and demand in the market. It is studied to justify the chosen option for using the land plot (the state and prospects of market demand for the proposed use, competition from other sites, types of taxes and other conditions). It is necessary to single out a segment of the market in which it is necessary to develop activities;

3) financial feasibility - the ability of the project to provide income from the use of the land, which would be sufficient to reimburse investors' expenses and ensure the expected profit;

4) physical suitability of the site - the prospect of making improvements - size, topography, soil quality, climate, engineering-geological and hydro-geological characteristics of the site, existing zoning, environmental parameters, etc.;

5) technological feasibility and physical feasibility - analysis of the ratio of quality, costs and terms of the project, the likelihood of natural disasters, the availability of transport, the ability to connect to utilities, taking into account the size and shape of the site, for example, the size may be small for the construction of an industrial facility;

6) legislative (legal) admissibility - compliance of the option of using the land plot with the current legislation. It is revealed as a result of the analysis of construction, environmental standards, floor restrictions, the presence of temporary bans on construction in a given location, difficulties in the area of ​​​​historical urban development, a possible change in regulations, compliance with zoning rules, negative moods of the local population;

7) maximum return (maximum property income and site value), which is determined by discounting the future income of alternative use cases, taking into account the risk of investment.

2.6.2. Assessment of the efficiency of urban land use

Urban lands are a special category. Their value is influenced by the size of the city and its production and economic potential, the level of development of engineering and social infrastructure, regional natural, environmental and other factors. In addition, there are peculiarities of legislation for this category of land.

The same factors can have the opposite effect on the value of a particular site:

- heavy traffic is undesirable for a residential area, but increases the value of the site for trade purposes;

- location relative to educational institutions and shopping centers, aesthetic merits and amenities taken into account when assessing land for housing construction, practically do not affect the value of territories oriented to industrial development; transport infrastructure and economic zoning are important to them.

The main units used for comparison of land plots:

- price per 1 ha - for large areas of agricultural, industrial or housing construction;

- price per 1 m2 - in business centers of cities, for offices, shops;

- price for 1 frontal meter - for commercial use of land in cities. In this case, the cost of the lot is proportional to the length of its boundary along the street or highway, with the standard depth of the lot, which accounts for a small part of the cost;

- price per lot - is used to compare standard plots in terms of shape and size in areas of residential, summer cottage development;

- price per unit of density - ratio of building area to land area, etc.

Most land resources are currently in state and municipal ownership. Practice shows that in market conditions, urban land is a valuable resource and can serve as a stable source of income for the local budget. The city authorities determine the amount of the land tax, the rental rate for land and the standard price of a land plot upon redemption, so the issue of increasing the efficiency of land use is relevant for them. In order for land property to be used more efficiently, i.e., to bring the maximum income from use and contribute to the improvement of the overall investment climate, it is necessary to further develop market relations in the land market, focus on the current market situation and market requirements.

In order for land property to be used more efficiently, i.e., to bring the maximum income from use and contribute to the improvement of the overall investment climate, it is first necessary to implement the processes of taxation, lease and redemption of urban land based on its market value. At the same time, a fair distribution of the tax burden is achieved, stimulation of effective use and activation of investments in reconstruction and development in the process of restructuring the territory.

In the course of implementing the policy of charging for land resources based on their market value, the following results are achieved:

- creation and development of an adequate system of market relations in the system of payment for land resources;

- fair distribution of the tax burden;

- stimulating the redistribution of land between competing types of land use;

- stimulating the effective use and activation of investments in reconstruction and development in the process of restructuring the territory.

The redemption of a land plot by an enterprise makes it possible to use land as collateral for a bank loan, expand investment opportunities, sell surplus land, receive income from land lease, increase the value of fixed assets, and increase the market value of shares.

There are two views on the value of urban land:

- urban planner in the process of functional zoning of the territory as a section of the general plan of the city;

- an appraiser in the process of developing a cadastral valuation of land.

The basis for the formation of a cadastral valuation of land and functional zoning of the territory should be a comprehensive urban assessment of market value.

2.7. Land valuation methods

The normative method consists in determining the normative price of land. It is used when transferring, redeeming land for ownership, establishing common joint (shared) property in excess of the free norm, transferring by inheritance or donation, obtaining a loan secured by security, withdrawing for state or public needs.

City lands are assessed taking into account the building density, the prestige of the area, the nature of the surrounding land use, the ecological state, engineering and transport facilities, etc. The lands are divided into zones differentiated by the basic land tax rates and the standard price of land (Law of the Russian Federation "On payment for land") . The normative price of land is fixed in the Land Cadastre.

The basis for determining the standard price of land: land tax rates and multiplying factors, land tax benefits are not taken into account.

It is often necessary to value an object consisting of a building and a land plot, when the latter has only lease rights. In this case, the cost of land allocation for construction can be taken into account as the cost of land.

In market conditions, if the necessary information is available, it is advisable to apply methods based on the analysis of market data. Order of the Ministry of Property of Russia No. 07.03.2002-r dated 568 approved Methodological recommendations for determining the market value of land plots. As a rule, when assessing the market value of land plots, the sales comparison method, the allocation method, the land rent capitalization method, the distribution method, the remainder method, and the division into plots method are used.

The sales comparison method is the simplest and most effective valuation method, and can be used to value both actually free and supposedly vacant land; allows you to determine the specific price of a land plot by making percentage adjustments to the sales prices of analogues. In the absence of information on the prices of transactions with land plots, the use of supply (demand) prices is allowed.

Common elements of comparison for land plots: ownership, financing conditions, special conditions of sale, market conditions (change over time), location (distance from city and roads, environmental characteristics), zoning conditions, physical characteristics (size, shape and depth of the plot, angular location, soil type, topography), available utilities, economic characteristics, best and most efficient use. When valuing land, you can use several units of comparison, adjusting the price of each of them and getting at the end several values ​​that determine the range of values. Urban lands are a special category, their value is influenced by the size of the city and its production and economic potential, the level of development of engineering and social infrastructure, regional natural, environmental and other factors.

The method gives sufficiently accurate results only in a developed information-open competitive market. The Russian land market does not meet these requirements; the cost of a land plot cannot be determined based on information on sales transactions of analogous plots. Therefore, all available information should be collected for the assessment to apply all site assessment methods.

The method of capitalization of land rent is based on the fact that if there is sufficient information about the rental rates of land plots, it is possible to determine the value of these plots as the current value of future income in the form of rent for the assessed land plot. Within the framework of this method, the amount of land rent can be calculated as income from the lease of a land plot under the conditions prevailing on the land market. As a regular stream of income, land rents can be capitalized into value by dividing by a capitalization ratio for land determined from market analysis. The initial data for capitalization is obtained from a comparison of sales of leased land and rental values.

Based on the rental rate received, the market value of the land is determined using the income approach, usually using the direct capitalization method. The formula for calculating the cost of a land plot is

where VL is the cost of the land plot,

IL - income from land ownership,

RL: - capitalization rate for land.

The capitalization rate is determined by dividing the land rent for similar land plots by their sale price or by increasing the risk-free rate of return on capital by the amount of the risk premium associated with investing capital in the assessed land plot.

The main factors influencing the value of the rental rate of a land plot are: characteristics of the location, size, shape, surrounding type of land use, transport accessibility, engineering equipment.

However, in Russia, lands of the state and municipal fund are mainly leased, and the amount of the rent is calculated in accordance with the standard price of the land, which is not equivalent to its market value. Currently, attempts are being made to lease land at its market value, but it is still too early to talk about the objectivity of the results of the practical application of the land rent capitalization method.

Distribution method (method of ratio, correlation, allocation) - determination of the cost component of a land plot based on the known ratio of the cost of land and improvements in the property complex. The method is based on the principle of contribution and the assertion that for each type of property there is a normal ratio between the value of land and buildings. This ratio is most reliable for new buildings, they are close to the option of the best and most efficient use. The older the buildings, the greater the ratio of land value to total property value.

To apply the method, reliable statistical data on the ratio of the values ​​of land and all property of a particular type of real estate in a given market are required. However, the method is rarely used even in developed markets, as it has low reliability. The application of the method is justified in the conditions of insufficient information on sales of land plots. The values ​​obtained are considered indicative.

The allocation (extraction) method is used to evaluate built-up land plots if there is information on transaction prices for similar real estate objects. Land improvements correspond to its most efficient use. The method involves the following sequence of actions:

- definition of elements of comparison of objects;

- determination of the differences of each analogue from the object of assessment;

- calculation and making adjustments for each of the comparison elements;

- calculation of the market value of a single real estate object, including the assessed land plot, by reasonable generalization of the adjusted prices of analogues;

- calculation of the cost of replacement or the cost of reproduction of improvements to the assessed land plot;

- calculation of the market value of the assessed land plot by subtracting from the market value of a single real estate object, including the assessed land plot, the cost of replacement or the cost of reproduction of improvements to the land plot.

The selection method is used when the contribution of improvements to the total price of the plot is small, it is recommended for evaluating suburban plots (for which the contribution of improvements is small and fairly easily determined), it is used when there is no data on sales of land in the vicinity.

The method is the most effective in a passive market (there is no data on the sale of vacant land plots), taking into account the characteristics of the initial information and the model for obtaining the desired value. The cost of a land plot in general terms is determined by the formula

where Cz, - the cost of the land,

C - the cost of the object,

Su - the cost of improvements.

The residual method is based on the investment group technique for physical constituents. The method is applied to the valuation of built-up and non-built-up plots, if there is a possibility of building up the assessed land plot with income-generating improvements. The value of land is determined as a result of the capitalization of the part of income related to land.

To determine the value of a land plot, it is necessary to know the value of the building, the net operating income of the entire property, the capitalization ratios for land and for buildings.

The main steps of the residual method for land are:

1) the net operating income of the entire property is determined based on market rent and estimated operating costs;

2) the net operating income related to the structure (building) is determined;

3) net operating income attributable to the land plot is capitalized into the value indicator through the capitalization rate for the land.

It is difficult to predict income in conditions of insufficient economic stability.

The parceling method (development approach) is used to assess land suitable for division into individual parcels. Consists of the following steps:

- determination of the size and number of individual plots;

- Calculation of the cost of developed areas using the comparable sales comparison method;

- calculation of costs and development schedule, estimated sale period and reasonable business profit;

- deduction of all development costs and business profits from the estimated total sale price of the plots to determine the net proceeds from the sale of real estate after the completion of the development and sale of individual plots;

- selection of a discount rate that reflects the risk associated with the period of expected development and sale.

Land development costs typically include:

- expenses for breakdown, clearing and planning of sites;

- expenses for the construction of roads, sidewalks, engineering networks, drainage;

- taxes, insurance, engineers' fees;

- marketing expenses;

- profit and overhead costs of the contractor, etc.

In general, the modeling of the market value of land plots is carried out under the assumption of achieving a dynamic equilibrium in the competition of various "rational" land users for the right to occupy a certain plot. When the balance of solvent demand and supply in the simulated land market with limited supply, the issue of the most efficient use of the site as free and taking into account the existing development is decided. Modeling of potential rental income for various types of land use is based on the patterns of formation of rental effects of location and prevailing prices (sales and leases). Given the significant difference in cost indicators for sites located along the front of the city's street and road network and located in intra-quarter territories, these sites are subject to mandatory division during assessment. The implementation of the principle of the most efficient use takes place in the conditions of competition for the use of real estate between different functional segments of the market, taking into account real restrictions on the volume of demand and the possible multifunctionality of the territory, as a result of which a set of land users is formed on each site.

2.8. Real Estate Appraisal Report

An appraisal report is a written document that meets all the requirements of professional ethics, clearly and in an accessible way reflecting the course of the appraisal process and containing the initial data used by the appraiser, their analysis, conclusions and the final value. The appraisal report appendix contains all photographs, sketches, and maps not included in the main sections of the report. Sometimes the appendix includes a glossary of terms.

In the report, in addition to the limiting conditions, assumptions may be indicated - statements made by the appraiser in the evaluation process based on his professional opinion, but not supported by actual data.

Consider the basic requirements for the content of the valuation report and a case study on the valuation of a property.

The appraisal report of the object of appraisal must be drawn up in writing and handed over to the customer in a timely manner. The report must not be ambiguous or misleading. If not market value is determined, but other types of value, the criteria for establishing the result of the appraisal and the reasons for the deviation from the possibility of determining the market value of the appraisal object should be indicated.

According to Art. 11 of the Law "On valuation activities in the Russian Federation", the valuation report indicates:

- date of compilation and serial number of the report;

- the basis for the appraiser to evaluate the object of appraisal;

- the legal address of the appraiser and information about the license issued to him to carry out appraisal activities for this type of property;

- an accurate description of the appraisal object, and in relation to the appraisal object owned by a legal entity, details of the legal entity and the book value of this appraisal object;

- valuation standards for determining the appropriate type of value of the valuation object, the rationale for their use in the valuation of this valuation object, the list of data used in the valuation of the valuation object, indicating the sources of their receipt, as well as the assumptions made during the valuation of the valuation object;

- the sequence of determining the value of the object of assessment and its final value, as well as the limitations and limits of the application of the result obtained;

- date of determination of the value of the appraisal object;

- a list of documents used by the appraiser and establishing the quantitative and qualitative characteristics of the appraisal object.

The report may also contain other information that, in the opinion of the appraiser, is very important for the completeness of the reflection of the method used by him to calculate the value of a particular object of appraisal.

The report is personally signed by the appraiser and certified with a seal.

If there is a dispute about the reliability of the value of the market or other value of the object of appraisal, established in the report, this dispute is subject to consideration by the court.

Structure of the assessment report

Covering letter.

1. General information.

1.1. Basic facts and conclusions.

1.2. The purpose of the assessment.

1.3. Assessed rights.

1.4. Assessment Quality Certificate.

1.5. Appraiser Qualifications.

1.6. Assumptions made and limiting conditions.

2. Terminology used and evaluation process.

3. Analysis of the object of assessment and its environment.

3.1. Description of the land.

3.2. Description of improvements.

3.3. General characteristics of the region.

3.4. Analysis of the real estate market of the city.

4. Analysis of the best and most efficient use of the object of assessment (NNEI).

4.1. NNEI analysis of the land plot as free.

4.2. NNEI analysis of the land plot with existing improvements.

5. Determination of the value of the object of assessment.

5.1. Determining the value of land.

5.2. Determination of the cost of improvements:

- a costly approach

- comparative approach,

- income approach.

6. Reconcile the results into a final cost estimate.

3. Determining the value of invested capital based on income capitalization

To analyze the soundness of real estate investment financing, it is necessary to know some elements of financial mathematics and the model of converting real estate income into present value, which are discussed in this chapter.

More attention is paid to the analysis of capitalization of income by the rate of return, since the use of this method involves the most detailed analysis of investment income flows: the nature of the change in cash flows is taken into account, the decisions of investors are analyzed sequentially.

3.1. Direct capitalization

The main capitalization methods are the direct capitalization method and the income capitalization method based on the rate of return on capital.

The choice of capitalization method in each case is influenced by the following factors:

- type of property;

- effective age and economic life of the object;

- reliability and extensiveness of information;

- characteristics of income from the object of assessment (amount, duration of receipt, rate of change).

The most commonly used capitalization methods are:

- direct capitalization, when the value of the object is determined by dividing the net annual income by the capitalization rate;

- the gross rent method based on the valuation of property, taking into account the values ​​of potential or actual income and the gross rent multiplier;

- method of discounting cash flows - valuation of the object, when cash flows are received unevenly, arbitrarily change, while taking into account the degree of risk associated with the use of property;

- residual method - property valuation taking into account the influence of individual factors of income generation (in combination with the residual method, methods of both direct capitalization and capitalization of income at the rate of return can be used);

- method of mortgage-investment analysis - property valuation based on accounting for the cost of own and borrowed capital.

The choice of a specific method of capitalization is determined by the nature and quality of the expected income.

In the current conditions of economic and political instability in Russia, due to the difficulty of making reliable forecasts, the direct capitalization method is widely used, which does not require such a thorough analysis of cash flows as with capitalization by the rate of return.

Direct capitalization is the valuation of property while maintaining stable conditions for its use, a constant amount of income, the absence of initial investments and, at the same time, taking into account the return of capital and income on capital.

The capitalization rate is usually calculated on the basis of an analysis of market information about analogues of the object of assessment by dividing the net annual income by the selling price of the analogue.

Considered in the previous chapter, the basic formula of the income approach

with direct capitalization, it is usually applied in the following form:

where PV is the current value of the property,

NOI - expected net operating income for the first year after the assessment date,

R₀ - total capitalization rate.

Normalized net operating income for 1 year, obtained by averaging income over several years, can be used as NOI.

The capitalization rate Dd reflects the risks to which the funds invested in the asset are exposed. Methods for calculating the capitalization rate are selected depending on the specific conditions in which the object of assessment operates: information on income and transaction prices based on a sample of comparable objects, sources and conditions for financing transactions, the possibility of a correct forecast regarding the value of the object at the end of the forecast period.

Direct capitalization is possible using the gross rental multiplier - the average statistical ratio of the market price to the potential or actual gross income of a certain type of property.

Gross rent multiplier (RM)

The main conditions for applying the direct capitalization method:

- the period of receipt of income tends to infinity;

- the amount of income is constant;

- the conditions for using the facility are stable;

- initial investments are not taken into account;

- return of capital and return on capital are taken into account simultaneously.

For direct capitalization, models are used based on determining the value of real estate by dividing typical net operating income by the total capitalization rate, obtained on the basis of an analysis of the relationship between income and sales prices of analogues of the object of appraisal. Here are some examples of direct capitalization models.

Advantages of the direct capitalization method:

- simplicity of calculations;

- a small number of assumptions;

- reflection of the state of the market;

- obtaining good results for a stable functioning real estate object with low risks (building with one tenant and long-term lease).

Along with the sufficient ease of application of the method, one should take into account the complexity of the market analysis and the need to make adjustments for differences between the compared objects. The method should not be applied if there is no information on market transactions, the object is under construction or reconstruction, or if the object has suffered serious damage.

The capitalization rate is applied when converting future income from real estate into its current value.

The sales comparison method, the debt coverage ratio method, the investment group method, the actual gross income ratio method, and the balance method are used to calculate the capitalization rate.

The sales comparison method is the main method for determining the overall capitalization rate. When determining the capitalization rate for the appraised object, the capitalization rate is first calculated for each of the sold analogues using the formula

where SPi is the selling price of the i-analogue.

Then, taking into account the methods of mathematical statistics, the weight coefficient xi, which reflects the degree of similarity of each of the sales to the object of assessment, the total capitalization rate is selected

As Ri, the capitalization rate for alternative investments with a similar degree of risk can be used, then x is the weighting coefficient of the 1st investment.

The analyzed analogues of the object of assessment should have the following characteristics similar: the remaining economic life, the level of operating costs, reversion values ​​and loss factors, risks, the ratio of land and buildings values, the date of sale, the method of the best and most efficient use, financing conditions, the level of quality of management . In addition, the location and decoration of objects should not fundamentally differ.

The debt coverage ratio method is applied when debt capital is used to finance real estate investments.

The DCR debt coverage ratio is calculated as follows:

where DS is the annual debt service.

The total capitalization rate is determined by the formula

where Rm - total capitalization rate; m - share of borrowed funds:

where Vm is the cost of borrowed funds, or the amount of the loan;

V - the cost of the object;

Rm - capitalization rate for borrowed funds:

Data for the debt coverage ratio calculation is readily available, but this method provides an indicative value for the capitalization rate in cases where market data is not sufficiently reliable. Therefore, the coverage ratio method is used only as a corrective one.

The investment group method is used if borrowed capital is involved in the purchase of real estate. At the same time, the capitalization rate can be calculated both in relation to financial and in relation to physical components.

Investment group method for financial components. The capitalization rate is a weighted average that takes into account the interests of both equity and borrowed capital:

where Rm is the capitalization rate for equity, which is determined from data on comparable objects by dividing the value of income before tax by the value of own invested capital; Re, - capitalization rate for borrowed funds.

Investment group method for physical constituents. The capitalization rate is determined by the formula

where L is the share of land value in the total property value; Rl - capitalization rate for land;

Rh - capitalization rate for improvements.

The capitalization rate for land is calculated as the ratio of income attributable to land to the value of land. The capitalization rate for improvements is determined by the ratio of income attributable to improvements to the cost of improvements.

The method of the coefficient of actual gross income is applied if there is data on operating expenses and the amount of actual gross income:

where OER is the operating expense ratio; EGIM is the actual gross income ratio.

With direct capitalization, gross income ratios and the residual technique can be used to calculate the value of an object.

Application of gross income ratios. If operating expenses are not available, gross income figures are used and multiplied by the following appropriate factors:

- GRM - gross rent coefficient, if the period is equal to a month;

- GIM - gross income ratio, if the period is equal to a year.

These coefficients are determined by the ratio of income and sale prices of objects and are the reciprocals of capitalization rates.

The value of the property in this case is determined as follows:

or

where PGI - potential gross income;

PGIM is the coefficient of potential gross income, calculated according to the data on the analogues of the object of assessment:

EGI - actual gross income; EGIM - coefficient of the actual gross income:

SP is the sale price of an analogue of the appraised object.

The residual method is used in cases where the cost of one component of the appraised object is known. There are residual methods for land and buildings, equity and debt capital.

The sequence of application of the residual method:

- calculation of the part of the annual income, which falls on the component with a known value;

- calculation of the part of the annual income, which falls on the component with an unknown value;

- calculation of the cost of an unknown component;

- Determining the value of property by adding the values ​​of its components.

Consider the residual method for buildings when the value of the land is known. Calculations will be performed in accordance with the above sequence using the following formulas:

where IL is the annual income attributable to land; VL - land value; RL - capitalization rate for land.

where Jh, - annual income attributable to the building; J0 is the total annual income generated by the property.

where Vn, is the cost of the building; Rn - capitalization rate for buildings.

where V is the value of the property.

Apply similarly:

- residual method for land - when the cost of the building can be determined accurately enough;

- balance method for equity - if it is possible to determine the term of the mortgage loan and the amount of the annual debt service payment;

- the residual method for borrowed capital - when the cost of equity capital is known.

In general, direct capitalization calculations require the availability of comparable sales data. Capitalization of income by the rate of return is less dependent on market data, but this method should reflect the actual expectations and preferences of potential buyers of such properties.

3.2. Capitalization of income at the rate of return

3.2.1. Cash flow discounting

When capitalizing income at the rate of return, the income stream is considered in more detail than with direct capitalization, the nature of the change in cash flows is taken into account, investor decisions are consistently analyzed, and more complex calculation models are applied.

The main methods of capitalization of income according to the rate of return:

- discounted cash flow method, including a detailed analysis of income flows for each planning year;

- the method of capitalization according to calculation models, which consists in capitalizing the income of the first year, taking into account the trends in its change.

The method of discounting cash flows is the valuation of property with arbitrarily changing and uneven incoming cash flows, taking into account the degree of risk associated with the use of the object. In this case, the value of the property is determined as the sum of the present values ​​of the future income by separately discounting each of the periodic income streams and the projected future value of the property for which it can be sold at the end of the holding period. In these calculations, a discount rate is used - the corresponding rate of return on capital, called the rate of return or rate of return.

Cash flow is the cash flow that results from the use of property.

The method allows taking into account the current value of cash flows, which can change arbitrarily and have a different level of risk. General Model of the Discounted Cash Flow Method

where PV is the present value, n is the number of periods; Jn - income of the nth period; Y - discount rate.

Briefly, this model can be represented as follows

or

where PV is the resale price of the object at the end of the holding period (reversion); n - period of ownership; i - year of the forecast period; FV (n,Y) - current cost per unit (fourth function of compound interest) for n period at discount rate Y.

That is, the present value of real estate in accordance with the discounted cash flow method is determined as the sum of the present values ​​of income for each period of holding and reversion.

Reversion - income from the sale of the object at the end of the holding period.

The discount rate is otherwise known as the rate of return on investment. It characterizes the efficiency of investments, takes into account the entire total income (income on investments and income from changes in the value of the asset), brings the initial investment and the realized economic effect into line with time and risk factors. If net operating income from operations is analyzed, then a discount rate is applied that takes into account the rate of return and the rate of interest or rates for land and structures. If the return received by the investor on equity is analyzed, the rate of return on equity is applied.

Income streams are forecast based on a thorough analysis of the current state of the real estate market and its trends. In this case, the estimated costs of reconstruction or modernization should be deducted from the income streams of the relevant period.

The selection of the discount rate is based on an analysis of available alternative investment options with a comparable level of risk, i.e. the opportunity cost of capital is analyzed. This method requires accounting and analysis of indicators of income and capital for the entire investment period.

There is a common practice among Russian appraisers to estimate the period of ownership of an object in the range of 3-5 years.

Advantages of the discounted cash flow method:

- takes into account market dynamics;

- applicable in an unstable market;

- takes into account the uneven structure of income and expenses;

- Applicable for facilities under construction or reconstruction.

However, the method is rather complicated to apply, besides, there is a high probability of error in forecasting, the inaccuracy increases in the process of converting forecasted income into current value.

3.2.2. Forecasting cash flows from reversion

Revenues that are expected to be received outside the planning horizon are taken into account as proceeds from the resale of the object (reversion) in the last year of the planning period.

The main ways to predict cash flow from reversion:

- setting the future sale price based on assumptions about the change in the value of the object over the period of ownership, the change during this period in the state of the real estate market in general and the market for similar objects in particular, resale - capitalization of income for the year following the year the investment project was completed:

where Vn - proceeds from the resale of the object in year n; DATSFn - discounted cash flow after tax in year n; Ro - total capitalization rate.

In the event of a decrease in the value of the property, the return of capital must be taken into account. If the asset's income streams fluctuate regularly, an adjustment factor for the capitalization rate should be applied.

3.2.3. Determining the discount rate

The discounted cash flow method is based on the present value of future randomly changing income from real estate ownership using discount rates that reflect the state and expectations of the market.

The discount rate is the rate of compound interest used when recalculating the value of cash flows at a certain point in time. The selection of the discount rate is based on an analysis of available alternative investment options with a comparable level of risk (opportunity cost of capital).

Consider some methods for determining the discount rate.

summation method. The method is based on comparing the returns and risks of available alternative investments. The discount rate is calculated as a result of adding percentage components (premiums), reflecting the additional risks inherent in the investment project, to the rate of return on investments, which, in comparison with other investment instruments, are considered risk-free.

The method involves taking into account the main risks that are most relevant for real estate investments:

- liquidity risk of the investment object;

- investment management risk - the likelihood that the level of investment management may decrease, and this will lead to a decrease in the value of the property;

- the risk of the real estate market - the likelihood that a change in the ratio of supply and demand may affect the level of income from the object;

- capital market risk - the probability that a change in the rate of return and the rate of interest will lead to a change in the value of real estate;

- inflation risk - the risk of an unexpected change in real income, the degree of this risk for investments in real estate is low, since with inflation the value of real estate and the level of rental rates tend to increase;

- financial risk - taken into account in the case of using debt financing, reflects the possibility of a negative change in financial leverage;

- legislative risk - the likelihood of a decrease in the value of real estate due to a possible change in legislation;

- environmental risk - reflects the likelihood of a decrease in income from real estate due to the emergence of adverse environmental factors.

Market analysis method. The method is based on the analysis of market data; if sufficient information is available, it is considered the most accurate method for determining the discount rate, as it allows you to more accurately take into account the opinions of typical sellers and buyers, risks, location features, and income characteristics.

The opinion and preferences of investors are taken into account through a survey or analysis of real transactions. The discount rate is defined as the ultimate rate of return for comparable properties. To identify the final return rate, the concept of the internal rate of return IRR is used - the discount rate at which the current value of all cash receipts during the development of an investment project is equal to the current value of investments.

Method for comparing alternative investments. In this case, it is assumed that investment projects with a similar level of risk should have similar discount rates. The discount rate for a project with a similar degree of risk is called the opportunity cost of capital. An investor loses such a profit by not investing in a project with a similar risk.

As an object of comparison for investments in real estate, the rate of interest on commercial loans with collateral, the rate of return on some securities is chosen. The degree of risk for the lender is lower than for the equity investor, so the return on investment in real estate must be higher than the rate of interest on the loan.

Method of investment group (combination of investments). The method is based on determining the share of debt and the share of equity in the total investment and the required rates of return for each of these components.

The interest rate and the income rate are correlated with the share of borrowed and own funds invested in the process of financing the investment project, the total discount rate is determined taking into account financial components as a weighted average:

where Y0 is the total discount rate; Ym - discount rate for borrowed funds; Ye - for own funds.

The method is applicable when the attraction of borrowed capital for investment in real estate is typical, the average market terms of credit ratios and the average market values ​​of the return on equity of investors are known.

3.2.4. Capitalization by calculation models

The calculation model capitalization method is based on the analysis of changing income streams using a general capitalization rate.

The total capitalization rate is calculated taking into account the market value of the rate of return, the chosen recapitalization model, financing conditions, income change rates and the value of the object. The main components of the capitalization rate are the discount rate and the income rate. In accordance with Western methods, in the case of real estate appraisal for tax purposes, the effective tax rate should be taken into account.

The discount rate is the required rate of return on invested capital, which is the ratio of the present value of income earned in each period to the cost of capital. The cost of real estate is high and for its acquisition, the implementation of investment projects, it is necessary to attract borrowed capital. In accordance with this circumstance, the discount rate includes the following components:

a) interest rate - the required rate of return on borrowed capital;

b) rate of return - the required rate of return on equity.

The recovery rate reflects the return on invested capital over the life of the property. The recovery rate is often referred to as the rate of return on investment. It only applies to the share of the investment that will be spent during the investment period. Due to the fact that the land is not consumed, the replacement rate for landed property is not taken into account.

The effective tax rate is the property tax rate expressed as a percentage of the market value of the property. Should be included in the capitalization rate only in cases of real estate appraisal for tax purposes. In this case, the property tax is not included in operating expenses, so its amount is not yet known.

In most cases, the largest of all components of the capitalization rate is the discount rate. Therefore, the capitalization rate begins to be determined by identifying the rate of return on risk-free liquid capital investments that do not require large investment management costs (for example, a deposit to a bank account). This is the minimum rate that compensates for the depreciation of money over time. Then add adjustments for risk, liquidity, investment management. These components make up the discount rate (rate of return and interest rate).

Any investor, in addition to the return on capital, takes into account the return on invested capital. Therefore, a replacement rate is added to the discount rate.

Return of capital - return of initial investment through income or resale. A recovery rate is applied to account for the return of capital.

Reimbursement - the amount of periodic income that is necessary to return the investment during the investment period. The annual recovery rate depends on the rate of change in the income from the object, the duration of its receipt and the income from the future resale of the object, if the possession is not perpetual.

If a steady flow of income from perpetual holding is expected and the value of the fixed capital of the income-producing property is expected to remain unchanged, then no consideration of the investment recovery factor is required, and the capitalization rate will be equal to the discount rate.

In addition to the depreciation of money, a decrease in the value of property can occur for two main reasons:

1) due to a change in the ratio of supply and demand in the market, which, on the one hand, increases the risk rate, on the other hand, the risk rate must be reduced if an increase in the value of real estate is expected;

2) due to depreciation accumulated by the property, as a result of which it is necessary to take into account the compensation in the capitalization rate.

If during the period under review there is a change in the value of the object, then the capitalization rate is determined as the sum of two coefficients: the rate of return and the rate of return of the principal amount. If a decrease in the value of capital invested in real estate is possible, some or all of the capital must be recovered from the current income stream.

The recovery rate, or rate of return on investment, applies only to the share of the investment that will be spent during the investment period (for land plots it is not taken into account, since the land is not consumed). The recovery rate is needed to determine the amount that is required to be received annually for a return on investment during the period of ownership. The effect of inflation is reflected in the risk rate (a component of the discount rate), the recovery rate reflects the effect of property depreciation on the sale price.

The choice of method of reimbursement depends on the nature of the income received. The main forms of receipt of income streams:

1) uniform periodic receipts of income without limitation of the terms of ownership of the object;

2) uniform periodic receipts of income for a limited period of time, after which the resale of the object is planned;

3) decreasing periodic receipts of income during the period of time, which is limited by the end of the lease term or the complete depreciation of the object due to the expiration of the service life;

4) increasing income streams during the forecast period;

5) a one-time receipt of an income stream from the future resale of the object.

Along with the above forms of receipt of income streams, there may be combinations of them. For example, a combination of increasing or decreasing income streams with future resale of the property.

The main options for recovering the cost of capital: the return of capital in equal shares, the model of an endless stream of income, the Inwood method, the Hoskold method.

The method of compensation in equal shares is based on the fact that the reimbursement of capital investments occurs annually in equal shares during the life of the property. The reimbursement rate is calculated as the reciprocal of the remaining service life. The use of this method is justified for multifunctional real estate with significant wear and tear, residential real estate, offices.

Example. The remaining life of the building is 25 years. Then the reimbursement rate will be 4%:

That is, for the remaining 25 years of the life of the property, the annual amount of capital recovery should be 4% of the value of the property.

The method is applicable, in particular, if a steady decline in net operating income is expected due to increasing depreciation of the property, with short-term leases, the precarious financial position of the tenant.

The infinite stream of income model is applied in two cases:

1) there is an endless stream of income;

2) the income stream is finite, but the sale price of the object is equal to the initial investment. That is, the value of the asset does not change, and income can be capitalized at a capitalization rate equal to the discount rate:

If at the end of the investment project the value of the property depreciates in whole or in part, the initial capital can be returned from the income stream.

The Inwood method assumes the return of capital from the replacement fund at the rate of return for investment, i.e. the rate of return of principal is equal to the rate of return on investment. The recovery fund factor generates a cash flow that corresponds to a full return on the initial investment.

The overall capitalization ratio should include a rate of return on capital (R0) and a recovery fund factor (SFF) that generates a recovery fund corresponding to a full return on the initial investment. The basic formula for calculating the total capitalization rate if the asset is fully depreciated is:

A feature of the Inwood method is that the formation of the compensation fund is carried out at the rate of return on investment.

The Hoskold method is applied with evenly flowing income streams, in which case the amount of reimbursement is received every year and deposited in the checking account at an interest equal to the risk-free rate. The method assumes that the investor does not have available options to reinvest at a rate equal to that of the original investment. In this case, in order to secure the return of their funds, the investor forms a compensation fund, reinvesting at the lowest possible rate, i.e., at the risk-free rate.

Unlike the Inwood method, which uses a rate of return on investment, the Hoskold method, based on the use of the risk-free rate as the basis for capital recovery, is used much less frequently.

3.2.5. Capitalization of uniformly varying income

If the income from the object changes regularly, the capitalization rate must be adjusted:

where R is the capitalization rate, excluding changes in income streams; R* - capitalization rate adjusted for changes in income streams; Kk - correction factor.

If income increases, the capitalization rate decreases; if income decreases, the capitalization rate increases.

3.3. Mortgage investment analysis

Mortgage investment analysis is to determine the value of property as the sum of the cost of own and borrowed capital. This takes into account the investor's opinion that he pays not the cost of real estate, but the cost of capital. The loan is seen as a means of increasing the investment required to complete the transaction. The cost of equity is calculated by discounting cash flows to the equity investor from regular income and from reversion, the cost of borrowing is calculated by discounting debt service payments.

The current value of the property is determined depending on discount rates and cash flow characteristics. That is, the present value depends on the life of the project, the ratio of equity and debt capital, the economic characteristics of the property and the corresponding discount rates.

Let us consider the general algorithm of mortgage-investment analysis for calculating the cost of property, the purchase of which is financed with the involvement of borrowed capital, and, accordingly, the cash flows of periodic income and from reversion will be distributed between the interests of equity and borrowed capital.

Step 1. Determining the present value of regular income streams:

- a report on income and expenses is prepared for the forecast period, while the amounts for servicing the debt are calculated based on the characteristics of the loan - the rate of interest, the full amortization period and repayment terms, the size of the loan and the frequency of payments to repay the loan;

- cash flows of own funds are determined;

- the rate of return on invested capital is calculated;

- based on the calculated rate of return on equity, the current value of regular cash flows before tax is determined.

Step 2. Determination of the present value of the reversion income minus the unpaid balance of the loan:

- income from reversion is determined;

- the balance of the debt at the end of the period of ownership of the object is deducted from the income from the reversion;

- according to the rate of return on equity calculated at stage 1, the current value of this cash flow is determined.

Step 3. Determining the value of property by summing the current values ​​of the analyzed cash flows.

Mathematically, the definition of the value of an asset can be represented as a formula

where NOI - net operating income of the n year of the project; DS - the amount of debt service in the n year of the project;

TG - reversion amount excluding selling expenses;

UM - unpaid balance of the loan at the end of the project term n; i - return on equity; M - the initial amount of the loan or the current balance of the principal amount of the debt.

This formula can be applied as an equation in the following cases:

- if it is difficult to predict the amount of property reversion, but it is possible to determine the trends of its change in relation to the initial cost, then in the calculations it is possible to use the reversion value expressed in shares of the initial cost;

- if the condition of the problem does not specify the amount of the loan, but only the share of the loan.

Consider the main criteria for the effectiveness of investment projects.

Net present value - a measure that measures the excess of benefits from a project over costs, taking into account the present value of money

where NPV is the net present value of the investment project; Co - initial investment; Сi - cash flow of period t; i, - discount rate for period t.

A positive NPV means that the cash receipts from the project exceed the costs of its implementation.

Steps to apply the net present value rule:

- forecasting cash flows from the project during the entire expected period of ownership, including income from resale at the end of this period;

- determination of the alternative cost of capital in the financial market;

- determination of the present value of cash flows from the project by discounting at a rate corresponding to the opportunity cost of capital, and subtracting the amount of initial investment;

- selection of a project with the maximum NPV value from several options.

The greater the NPV, the greater the income the investor receives from investing capital.

Consider the basic rules for making investment decisions.

1) The project should be invested if the NPV value is positive. The considered efficiency criterion (NPV) allows taking into account the change in the value of money over time, depends only on the predicted cash flow and the alternative cost of capital. The net present values ​​of several investment projects are expressed in today's money, which allows them to be correctly compared and added.

2) The discount rate used in calculating NPV is determined by the opportunity cost of capital, i.e., the profitability of the project is taken into account when investing money with equal risk. In practice, the profitability of a project may be higher than that of a project with alternative risk. Therefore, the project should be invested if the rate of return is higher than the opportunity cost of capital.

The considered rules for making investment decisions may conflict if there are cash flows in more than two periods.

The payback period is the time required for the amount of cash flows from the project to become equal to the amount of the initial investment. This investment performance meter is used by investors who want to know when a full return on invested capital will occur.

Disadvantage: payments following the payback period are not taken into account.

4. Management of the process of investment and financing of real estate

The uniqueness of real estate requires careful study of the financial, legal, technical side of each investment object. In addition, it is important that the profitability of investing depends on the quality of property management.

4.1. Criteria for the effectiveness of investment projects

When analyzing investment projects, the investment value of the property is analyzed taking into account its market value.

The evaluation of the effectiveness of investments is carried out taking into account the following information:

- the cost of construction, determined by analogues, by specific indicators with adjustments, by predictive and expert estimates;

- clarification of sources and conditions of financing;

- analysis of income from the object, changes in profitability;

- selection of the investment period for conducting a feasibility study (includes construction, development, operation);

- forecasting changes in prices for components of income and costs;

- calculations to identify reserves to increase the economic efficiency and reliability of the investment project.

The duration of the forecast period, within which calculations are made to determine the effectiveness of the investment project, is determined taking into account the duration of the creation, operation and, if necessary, liquidation of the facility, the period for achieving the specified profitability characteristics, the requirements and preferences of the investor.

Comparison of investment projects is carried out by applying certain performance criteria, the main of which are the net present value of the project, the payback period of the project, the profitability index of the project, the internal rate of return of the project and its modifications, the average return on net capital.

The considered general model of mortgage-investment analysis allows us to conclude that the period of ownership of an asset affects the value of the property, as the amount and value of cash flows to equity change. There is a tendency to reduce the current value with an increase in the period of the investment project. Therefore, the period of investment ownership should be predicted based on the general economic situation, the financial condition of the investor, the profitability of alternative investments.

The profitability index is the ratio of the present value of future benefits to the initial investment:

Another definition of the profitability index is the ratio of the present value of all positive cash flows from a project to the present value of all negative cash flows.

An investment project should be accepted if this value is greater than 1. At its core, the profitability index corresponds to NPV. The profitability index should not be used when selecting mutually exclusive projects.

The Internal Rate of Return (IRR) is the discount rate at which the present value of the return on capital is equal to the initial investment, i.e. NPV=0.

The disadvantages of this criterion are less obvious than with the payback period. Determination of IRR consists in selecting an appropriate discount rate for cash flows. To do this, all positive and negative cash flows of the project are analyzed to determine the discount rate at which their algebraic sum is equal to zero.

By comparing the IRR with the opportunity cost of capital, it can be determined whether the project will have a positive NPV: if the opportunity cost of capital is less than the IRR, then the NPV is greater than zero.

The project can be invested if the opportunity cost of capital is less than IRR. When comparing investment projects, projects with a large IRR value are more preferable.

In practice, the internal rate of return is quite often used as the main investment criterion, but this efficiency criterion is incorrect if different discount rates must be considered or if the initial cash flow is greater than zero.

There are techniques that adjust the IRR to apply in a given situation.

For example, the modified internal rate of return (MIRR) allows IRR to be applied when there is more than one change in the sign of the project's cash flows. This approach is convenient to use with phased financing of construction. The MIRR calculation is done as follows:

- discounting determines the value of all negative cash flows at the beginning of the project, the discount rate is calculated in accordance with the profitability of investments in liquid short-term securities;

- the internal rate of return of the project is calculated, which is a modified rate of return.

Average return on net worth. Used by some investors to make investment decisions based on an accounting rate of return. Accounting rate of return - the ratio of the average projected profit of the project after deducting depreciation and taxes to the average book value of investments. The resulting ratio is compared with the average for the firm or industry.

This criterion for the effectiveness of investment projects has serious drawbacks:

- does not take into account the change in the value of money over time;

- dependence on the accounting system used by a particular investor.

To make a decision, an investor is recommended to analyze several performance criteria, since none of them allows taking into account all the features of each specific situation.

4.2. Methods for analyzing investment projects

In investment analysis, the most probable, and not the only possible parameters are evaluated. Terms used:

Risk - the possibility of deviation of the actual final data from the expected planned results. Risk is zero if there is absolute certainty about future events.

Probability is the relative likelihood that some event will occur. When evaluating investments in real estate, the probability of an event occurring is directly related to the risk of an investment project.

Determining the degree of probability is carried out in several ways:

- based on the analysis and research of past events;

- as a result of scientific research and experiments;

- as a result of the analysis of the relationship of factors:

it can be expected that with a fall in the rate of profit in the capital market, the rate of profit of a certain type of real estate will fall;

- development of subjective judgments by an expert on the basis of verification of all premises.

Let us briefly consider the essence of some methods that allow us to measure the risk of an investment project and determine the appropriate behavior strategy if the degree of probability has already been determined.

Methods that allow measuring the risk of an investment project and determining a behavior strategy: debt coverage ratio method; payback period analysis; discounting by risk-adjusted rates of return; sensitivity analysis; Monte Carlo method; breakeven analysis.

The debt coverage ratio method is used to analyze the feasibility of a project that has debt financing. Debt coverage ratio - the ratio of net operating income to the annual amount of debt service:

As a measure of risk, the debt coverage ratio is commonly used when using mortgage lending to determine the degree of relative safety, depending on the terms of the mortgage. On the basis of DCR, the feasibility of an investment project with debt financing is analyzed. The specific value of DCR is different for different lenders and allows you to measure the risk, but does not take into account the risk related to a particular borrower (Shevchuk D.A. Organization and financing of investments. - Rostov-on-Don: Phoenix, 2006; Shevchuk D.A. Fundamentals of banking affairs. - Rostov-on-Don: Phoenix, 2006; Shevchuk D.A. Banking operations. - Rostov-on-Don: Phoenix, 2006).

Payback period analysis reflects the time interval during which money is in a risky investment. The payback period acceptable for an investor depends on the current economic situation.

When managing an investment portfolio, the payback period can help determine when to enter a project and when to exit a project.

Discounting by risk-adjusted rates of return. Discount rates that take into account all degrees of risk can be adjusted to compensate the investor for taking on additional risk.

Sensitivity analysis is based on the analysis of the sensitivity of the analytical investment model to a change in one parameter. It is believed that the greatest risk is brought by the factors, the change of which most significantly affects the result.

Sensitivity analysis is applicable to any element that tends to change.

Monte Carlo method. Sensitivity analysis allows you to take into account the change in only one variable, this Monte Carlo method is a combination of all possible changes in variables. This method requires complex computer models.

The break-even analysis is to determine the amount to which the actual gross income can fall before the project begins to generate losses. That is, taking into account the opportunity cost of capital, the level of real estate functioning is determined, at which NPV = 0.

4.3. Real estate financing risks

Risk reflects the possibility that actual outputs may deviate from expected planned results. Risks depend on the specifics of the investment project, profitability, stability in this market.

Consider the main risks associated with real estate financing:

- credit risk - losses if the borrower does not make payments;

- interest rate risk - the probability that the rate on a loan is adjusted less frequently than on borrowed funds in the face of rising interest rates;

- risk of early repayment - losses in case of early repayment of a loan with a fixed interest rate;

- risk of preliminary obligations - the risk of financing loans for which a fixed interest rate is determined before the start of financing;

- liquidity risk - the probability that the creditor will not have enough funds to pay for his obligations, received as repayment of debt on loans issued;

- the risk of changing the conditions for mobilizing funds - losses in the event of a decrease in the value of funds (base rate) when lending with a fixed premium (relative to the base rate).

Credit risk is associated with losses in cases where the borrower is unable to make loan payments or if the value of the pledged property is insufficient to repay the borrower's obligations to the lender. The borrower's solvency is determined by the ratio of the borrower's income and the interest rate on the loan. In the event of non-payment, there are several types of losses for the creditor. The lender incurs losses if the amount received from the sale of the real estate transferred to him in possession is less than the repaid part of the loan. Along with the costs of operating, repairing and selling property, there are also administrative costs for managing outstanding loans and seized property.

Credit risk management is carried out through a thorough analysis of the collateral object, the solvency of the borrower and the development of recommendations on the acceptable loan amount. When determining the probability of repayment of a loan, the main attention is paid to determining the amount of the borrower's income and assessing the value of the property transferred as collateral. When lending to real estate development (construction, reconstruction, modernization), credit risk is significantly reduced if it is known that the borrower has previously completed several projects similar to the one for which the loan is requested.

Interest rate risk is a decrease in the profit of a credit institution due to a negative unforeseen change in the level of interest rates. That is, these are potential losses caused by financing with an imbalance in the periodic revision of interest rates on loans and borrowed funds.

Ways to manage this risk: financing with securities with the same maturity and the use by lenders in calculating loan payments of various methods of indexing them to inflation and the borrower's income.

Prepayment risk is the potential loss on reinvestment that is caused by early repayment of a fixed rate mortgage. The risk also arises in connection with losses in the financing of loans, the interest rates for which are determined before the start of financing. This risk is called pre-commitment risk.

When lending, alternative conditions are provided for the lender and the borrower. The borrower receives the right to repay the loan before the end of the loan agreement, and the lender, in turn, has the opportunity to periodically change the interest rate on a loan with a changing interest rate. Lenders also provide borrowers with the ability to determine the rate of interest on a loan before the loan financing process begins.

Liquidity risk is associated with the insufficiency of receipt of payments on loans to fulfill the current obligations of the creditor, arises in connection with the difficulties in raising cash by selling assets at market prices or close to them. Liquidity risk management requires a number of financial transactions. In particular, the cash flow is calculated to determine the bank's cash needs and a cash mobilization strategy is developed with the identification of sources and costs. Reducing the liquidity risk is directly related to the development of the secondary market for mortgage loans, creating conditions for attracting long-term resources in this area, ensuring the refinancing of issued mortgage loans,

The risk of changing the terms of fund raising arises from long-term lending at a variable interest rate. In this case, the percentage premium on the loan is fixed, and the percentage premium on borrowed funds is variable.

The risk of changes in the terms of fund raising can be managed by financing loans with long-term floating rate debt.

Along with the above, there are specific risks that arise when lending to housing construction. For example, there is a risk that finished apartments may be sold more slowly than planned. Ways to mitigate this risk include requiring a certain number of units to be pre-sold and splitting the lending process into several independent steps when dealing with large projects.

There is also a risk of fire or theft of installed or stored materials or other property damage. Reducing this risk is achieved by insurance, security and other ways of ensuring security that do not contradict the law.

There is a risk of granting a loan due to the falsification of documents provided by the borrower and the diversion of loan funds for the intended purposes. It can be reduced, firstly, by investing funds received from the borrower and, secondly, by making an additional investment of the borrower's own funds if it is determined that the amounts remaining from the loan provided are not enough to complete the construction.

When financing investments, one should take into account the risks inherent in investments in real estate, which require a significant amount of capital investment, while they are long-term and subject to a greater influence of risk factors than investments in other areas of the economy.

The profitability of an investment project should be analyzed on the basis of estimates of the current risk-free rate, general market risk and risk due to the characteristics of real estate as an investment asset.

Risk-free investments are investments for which there is absolute certainty about their return. There are no absolutely risk-free investments, but those with the maximum degree of return reliability include investments, the return of which is guaranteed by the state.

Accordingly, the current rate on long-term government obligations (for example, bonds) or similar securities is taken as the risk-free rate when analyzing investments in real estate.

Market risk is the volatility of the annual value of IRR due to changes in regular income and the cost of capital. In the real estate market, unlike the securities market, profitability is determined not on the basis of simple statistical processing of sales prices and rental values, but on the basis of estimates performed by professional appraisers. Such estimates depend on the qualifications and experience of the appraiser and may be erroneous.

The risk associated with investing in real estate is a specific risk due to the unique features of real estate: low liquidity, high costs of money and time for transactions, the need for quality management. When investing in real estate, it is necessary to take into account the possible decrease in the profitability of the investment project relative to the projected one, the excess of actual costs over previously expected ones, the impossibility of completing the investment project due to an unforeseen excessive increase in prices for materials, the inability to sell the constructed object at the previously planned higher price, the exposure of real estate elements to risk destruction.

The following sources of risk of investment in real estate are distinguished:

- type of property;

- supply and demand in the market;

- location;

- compliance with the terms of the lease;

- depreciation of objects;

- legislative regulation and changes in taxation;

- inflation;

- reinvestment.

The risk of real estate type depends on supply and demand.

Location risk is broader as it also includes property type risk.

Lease risk is associated with the fact that the tenant cannot pay the full amount of the rent stipulated by the contract. This risk is more significant for real estate with a single tenant.

The risk of property depreciation lies in the fact that the profitability of real estate may decrease due to physical wear and tear and aging. In order to increase the profitability of a building, owners usually choose to incur significant material costs.

The risk of legislative regulation and changes in taxation is associated with the fact that significant costs will be required when increasing tax rates.

Inflation and reinvestment risks have less of an impact on real estate investment than the others listed above.

When investing equity capital, there is no way to diversify the risk through changes in the capital structure, diversification is achieved through different types of real estate and different regions.

Using debt to finance real estate investments means using mortgage debt.

Borrowed capital invested in real estate has the same types of risks as own capital. However, their total value is greater due to additional risks associated with the timely servicing of debt obligations and the risks of non-payment of the principal amount of the loan. There are two additional risks of debt capital invested in real estate:

1) the risk of a debt service deficit;

2) the risk of a large one-time refinancing.

The first risk is that the property owner may not be able to make the required debt service payments on time. In this case, the property is likely to be confiscated in favor of the creditor. Therefore, a change in the situation in the market or in the location may lead to the loss of real estate financed by debt capital.

The second risk is the risk of not being able to refinance a large one-off mortgage payment. It can also lead to loss of property.

The control of mortgaged real estate investors is much less than in equity investments, since part of the rights of such control is transferred to the creditor. Lenders determine the structure of capital raised from the property owner and limit the owner's rights to repay debt obligations.

On the positive side of real estate investment, if an increase in bond yields is the result of an increase in inflation, then this increase in inflation will be reflected in investors' expectations of rent increases, and the return on investment in real estate will tend to remain more stable than long-term bond yields. .

Ultimately, risks either increase or decrease the planned income. In the process of risk management, some of them can be reduced. To do this, it is necessary to identify possible risks, determine possible ways to reduce them and the associated costs, develop and monitor the implementation of measures to reduce risks.

4.4. Decision criteria for real estate financing

Due to the high cost of acquiring real estate, the implementation of investment projects in the field of real estate is carried out with the involvement of debt financing (for more details, see Shevchuk D.A. Loans to individuals. - M .: AST: Astrel, 2008).

Reasons for financing investments in real estate:

- insufficiency of the investor's own capital for a one-time payment for real estate, since, unlike, for example, shares, real property is difficult to divide, and significant amounts of money are required to complete a transaction at a time;

- the need for a higher management fee, which can improve its quality, quality management of real estate, real estate investment portfolio directly affects the increase in investment returns;

- iversification - the desire to manage several real estate objects to distribute risk due to the variety of investment objects, reduce competition, but many investment objects with limited equity capital require a larger loan, which creates additional risk;

- depreciation is deductible from the tax bases;

- positive financial leverage - when the property acquired with borrowed funds brings financial income at a rate exceeding the interest rate on the loan.

The price of property and the decisions of investors are influenced by the conditions of financing: the interest rate, the level of debt financing, the amortization period, etc.

The interest rate is the fee for using a loan. The lower the interest rate, the more attractive it is for the investor.

The level of debt financing is characterized by the size of the loan. The larger the loan, the more effective debt financing.

Criteria for choosing the maximum loan amount:

- at low interest rates, the criterion is the share of borrowed funds in the total volume of capital investments in real estate, this share for cautious investors is usually 70%;

- at high interest rates, the criterion is the debt coverage ratio.

The amortization period is the maturity of the loan. The longer this period, the lower the periodic payments. However, the total payments for long-term payments will be higher.

Other financing conditions:

- benefits for early repayment of loans:

- the right to early repayment without sanctions or with the application of a fine, which decreases with a reduction in the term of the loan agreement;

- limited liability: the borrower's liability is only for the mortgaged real estate; the creditor's rights do not apply to movable property in case of default on the loan (with unlimited liability, the lender has the right to the movable property of the insolvent borrower).

Consider the criteria for making decisions about lending.

The situation in the commercial real estate market changes very often, therefore, when deciding on lending in each particular case, it is necessary to re-examine the market situation. Attention should be paid to the current and expected balance of supply and demand, to objects requiring debt financing, risks, specifics of the location of real estate and the profitability of the loan and investment project.

Supply and demand. If the current and projected level of supply of objects is clearly higher than the level of demand - this is an unfavorable factor, some improvement should be expected. A decision needs to be made on the following issues:

- Will there be a constant demand for the object of collateral?

- Will there be a glut of the market with such objects before the end of the loan repayment period?

- Is there a need to shorten the loan term?

Risks are analyzed in terms of the fact that the lender's acceptance of higher risks must be paid by the borrower.

Location. It is analyzed whether the location of the lending facility will be beneficial throughout the entire loan period.

Profitability. Loans and investment projects accepted for financing must also be profitable. The conditions for granting loans should be somewhat better than in other banks. Loans must be repayable, relations with the borrower are good. In general, the fundamental factor in making decisions about real estate financing is the analysis of the investment project. Acceptable efficiency of the project - a guarantee of repayment of the loan in accordance with the established conditions.

Conclusion: financing of an investment project for the purchase of an office building is advisable, since the NPV value is not negative, the profitability of the investment project, taking into account debt financing, is acceptable to the lender.

4.5. Credit consulting

The range of problems solved by consulting is quite wide. And the specialization of companies providing consulting services can be different: from a narrow one, limited to any one direction of consulting services (for example, audit), to the widest one, covering a full range of services in this area. Accordingly, each specialist (or each firm) working in this field, puts the concept of consulting in its own meaning and gives it its own shade, determined by the direction of a particular company.

Credit consulting - provision of consulting services in the field of attracting credit and investment financing for legal entities and individuals.

Credit consulting, according to INTERFINANCE specialists, is a new type of business that is actively spreading today. Taking into account the ever-increasing interest of our clients in funds attracted from outside for business development, an objective need arose for the development of such a type of service as loan consulting.

Along with this, the offer of various credit programs by banks is also growing. Each of them not only offers the client special conditions, but also requires him to provide a completely specific set of documents and guarantees. It is becoming more and more difficult for a potential recipient of a loan to navigate independently in this area and it is becoming easier to get lost in this stream (for more details, see Shevchuk D.A. Organization and financing of investments. - Rostov-on-Don: Phoenix, 2006; Shevchuk D.A. Fundamentals of banking affairs. - Rostov-on-Don: Phoenix, 2006; Shevchuk D.A. Banking operations. - Rostov-on-Don: Phoenix, 2006).

Consulting is a kind of intellectual activity, the main task of which is to analyze, substantiate the prospects for the development and use of scientific, technical, organizational and economic innovations, taking into account the subject area and client problems.

Consulting solves the issues of management, economic, financial, investment activities of organizations, strategic planning, optimization of the overall functioning of the company, doing business, research and forecasting sales markets, price movements, etc. In other words, consulting is any assistance provided by external consultants, in solving a particular problem.

The main goal of consulting is to improve the quality of management, increase the efficiency of the company as a whole and increase the individual productivity of each employee.

When do clients turn to a consulting company for help?

According to popular belief, the services of external consultants are used primarily and primarily by those organizations that find themselves in a critical situation. However, assistance in critical situations is by no means the main function of consulting. In what cases and who turns to a consulting company for help?

Firstly, in cases where an enterprise with a reliable status plans to restructure the entire system, associated either with expansion, or with a change in the form of ownership, or with a radical change in the spectrum of the enterprise's activities and reorientation to more promising and / or profitable business areas .

Secondly, in cases where an enterprise with a reliable status, in order to assert its position in the market and create the necessary image in the eyes of potential partners, turns to the services of a consultant (for example, an auditor), conducts an audit of its activities (for example, an audit) and then makes its results public.

Thirdly, in cases where the enterprise is in a critical situation (or even on the verge of collapse) and is not able to get out of this situation on its own due to lack of experience and internal resources for an adequate and timely response to the situation. The services of a consultant (consulting firm) in this case are in the nature of a crisis-consulting.

Professional consulting services have been provided in Russia for more than ten years. Despite such a long period, a clear understanding of why to invite consultants and whether they should be invited at all, among potential consumers of consulting services has not yet developed. The reason for this is largely an inadequate understanding of what consultants can and cannot do, when it makes sense to invite them, and what are the necessary conditions for successful cooperation with consultants.

According to INTERFINANCE specialists, the main task of consultants is to assist clients in solving their management problems.

They can solve this problem in several ways:

- Find the problem and propose solutions. In a situation where the client is aware that he has a problem, but cannot determine what exactly it is, what are its true causes, consultants can analyze the situation and identify the problem and its causes, as well as develop and offer the client ways to solve it . This is the so-called expert consulting, when the consultants themselves do all the work to detect and solve the problem.

- Help the client find the problem himself and determine ways to solve it. There are situations when the client is ready to define the problem and solve it, but he lacks some methodological support for the successful implementation of his intentions. Then the consultants can provide the client with this methodological support and go with him all the way from discovering the problem to solving it.

This approach is called process consulting, i.e. consulting in the course of the client's management activities.

- Teach the client how to find and solve problems. Creating a system of practical knowledge in the client, a mechanism that allows him from now on to find and solve his problems is the essence of the third approach, called educational counseling.

With this approach, the consultant does not participate directly in the process of finding and solving problems, but only trains the client and checks the correctness of the "homework".

In practice, all three approaches often intersect and complement each other. Emphasis shifts depending on what the client most needs: to find a solution to the problem for him, or to help him solve the problem, or to be taught how to solve it.

Determining the extent of this need, as well as the need to involve consultants in general, depends on a number of factors:

- Time. As a rule, any problem introduces its time limits. Depending on how large the margin of time for solving a particular problem is, a choice is made in favor of one or another approach. Usually, expert advice is the fastest way to solve a problem if the invited consultant has proven methods for solving such problems.

- Labor resources. Each problem requires labor resources spent on its solution. When the scale of the problem is large enough, it can be quite difficult to single out people who will deal exclusively with solving it, given that all of the client's staff members have their own day-to-day responsibilities within the current activities. However, it is not economically feasible to hire and keep a dedicated staff of specialists for every problem, as some companies sometimes choose to do.

Consultants in this case are an additional workforce that is available when needed and removed when the need has passed.

- Money. Hiring consultants is costly. Depending on what financial resources the client can allocate to solve the problem, one or another approach of counseling is chosen. As a rule, training consulting is the cheapest way to solve problems if the client has the necessary manpower and time to train them.

- Knowledge. The level of expertise is no less critical than time or money. Of course, knowledge can be obtained through self-education.

However, the degree of consolidation of knowledge and the skills of their practical application will be different in this case. It is no coincidence that the effectiveness of full-time education is higher than that of distance learning. In addition, self-education is learning from your own mistakes, while by attracting consultants, you can learn from others.

- Objectivity. The consultant presents an independent view of the client's problems from the outside. By virtue of his independence, he is free from cliches and prejudices that have developed with the client over the years of his activity and which are often the sources of problems themselves. The consultant may ask questions that the client himself does not think about, because, due to established habits, he does not consider them questions. Finally, the consultant is a disinterested person in the sense that his only interest is the most effective solution to the client's real problems and he has no self-interest in these problems.

It should also be noted what the consultant cannot or should not do for the client and why they should not be invited:

- Making decisions. The consultant, as a rule, cannot make decisions for the client. The client himself is responsible for his business, responsible to the owners, contractors, personnel and himself, and he is to make the final decisions. The consultant only offers options for solutions, gives recommendations on the optimal solution, but does not make decisions themselves.

- Game with the law. The consultant cannot and in no case should give the client recommendations that are contrary to applicable law. Any recommendation the implementation of which brings the client into conflict with the law is a threat to the client's business and in itself creates a serious problem.

Thus, the consultant cannot and should not, by solving some problems of the client, create other, sometimes more serious problems for him - problems with the law.

- Participation in conflicts. The consultant cannot and should not participate in the client's internal conflicts. It is extremely unethical when some persons in the client's management invite consultants in order to "fall down" others. The consultant must always be above personal or group conflicts, act as an independent arbiter, look for solutions that are useful for the business as a whole, and not for individuals or groups of individuals.

- Formal results. The purpose of consulting assistance is to solve the client's problems, not to write a consultation report. The task of the consultant's activity should not be the creation of reports that are beautiful in form and empty in content, "candy wrappers" that are used to create the appearance of useful management activities. Therefore, you should not invite a consultant to write such a report, which will then be stored in a drawer and taken out from time to time for demonstration - this is too expensive and an unjustified way to impress.

Based on the above, it is possible to formulate cases when it is necessary to invite consultants. Generally speaking, consultants should be called in when there is a managerial problem that the client wants to solve. However, the participation of a consultant is especially effective in the typical situations listed below:

- When the problem is complex, systemic. If the scale of the problem is such that to solve it, it is necessary to carry out radical complex changes in the management system, the principles of building a business, it is best to invite third-party experts who will bring fresh ideas and provide the necessary labor resources. Solving complex problems usually requires significant labor costs and specialized knowledge.

- When the problem is one-time, situational. If the client has a problem that is caused by a combination of specific circumstances and is not repetitive, routine, and also requires a prompt solution, it is more efficient not to create internal organizational capacity to solve it, but to invite consultants once. At the same time, it is not effective to invite consultants to solve routine, everyday tasks, that is, to carry out current management activities.

- When there are differences of opinion on the problem and how to solve it within the management of the client or between management and owners. In this situation, consultants are the best independent arbiter, able to objectively assess the problem and offer objectively justified ways to solve it.

- When the solution to the problem may have serious consequences, including strategic, financial or social. This is a situation similar to the previous one, with the only difference that in this case the cost of solving the problem and the associated responsibility is quite high. Therefore, the management of the client may require independent expert justification for identifying and resolving the problem. Sometimes this is a way for the client to share responsibility with the consultant, not in terms of making a decision, but in terms of developing it.

There may be other situations when it is better to invite a consultant. The common criteria for all of them are:

- Presence of a problem;

- Lack of time or human resources to solve the problem;

- Lack of special knowledge to solve the problem;

- The high price of the issue.

There is no need to say that the invited consultant must be a conscientious professional - this is a prerequisite. However, there are a number of fundamental factors that determine the success of the client's interaction with consultants:

- Choosing the right consultant. No consultant can know everything. Some consultants are good for solving some kinds of problems, others are good for others.

Therefore, the right selection of a consultant for a specific problem is extremely important. It should be borne in mind that a well-known name does not always guarantee the correct selection. There are many highly specialized and simply obscure consultants that the client may not know about until he encounters a problem that requires their participation. The main thing here is to evaluate the methodology and practical experience that the consultant offers to solve the client's problems.

- Communication. The consultant and the client must use a similar conceptual apparatus or, in other words, speak the same language. Otherwise, a situation may arise when the consultant, using his analytical tools, will be able to identify the problem and find ways to solve it, but the client may not understand the recommendations of the consultant. Therefore, it is necessary to agree in advance on the meaning of those concepts and terms that both the client and the consultant use.

- The level of training. Recommendations have an effect only when implemented. But in order to use the recommendations of the consultant, the client sometimes needs to have an appropriate minimum level of training. Just as the implementation of even the most detailed workflow requires a certain level of technical expertise, so the implementation of the most detailed management recommendations requires a certain level of managerial expertise. If such a problem occurs, additional measures must be taken to ensure such training.

- Understanding goals and objectives. There are situations when the client does not clearly understand what exactly he wants, but he is determined to achieve it. This usually leads to the most serious problems in the interaction between the client and the consultant. Therefore, it is necessary to jointly determine the goals and objectives, and only then start work.

Thus, the second part of the question formulated in the title of this article can be answered as follows: you need to study in any case - knowledge will never hurt, even if (one might say - especially if) consultants are invited.

However, the training itself, without the practical application of the acquired knowledge, is worth little. When was the last time any of the top managers of enterprises had the opportunity to attend a serious educational course? And what part of the knowledge they have gained is actually applied today in everyday management practice? When working with consultants, regardless of the type of consultation, knowledge is directly embodied in practical activities, or, conversely, acquired in the process of solving specific problems.

In any case, the decision on the first part of the question - to invite or not to invite consultants - remains with the client. Consultants, as always, can only give the necessary recommendations, which was done in this article.

The service of obtaining financing from credit institutions is in demand among enterprises implementing investment projects, the cost of which significantly exceeds the cost of projects implemented earlier, as well as in the absence of their own experience in bank lending (for more details, see Shevchuk D.A. Organization and financing of investments. - Rostov -on-Don: Phoenix, 2006; Shevchuk D.A. Fundamentals of banking. - Rostov-on-Don: Phoenix, 2006; Shevchuk D.A. Banking operations. - Rostov-on-Don: Phoenix, 2006).

The implementation of such projects may include a work plan to increase the investment attractiveness of the enterprise as a Borrower.

A team of consultants, which includes diversified highly qualified specialists (financiers, lawyers, economists, marketers, etc.), can provide the client with a full range of services - from preparing a business plan to finding and identifying a financial source (bank, investment company, investment fund, private investors, etc.) in order to assist enterprises and organizations - potential borrowers - in preparing documents for obtaining a loan, choosing forms and methods of lending, searching for investors and arranging financing.

The consulting services and products offered by the Credit Agency (credit broker) are as close as possible to the requirements of investors - banks and other credit institutions and investment companies.

Actively cooperating with various banks, the Credit Agency offers clients the organization of financing - the search and selection of banks for lending to investment projects, financing the development of production, its reorganization and technical re-equipment, as well as obtaining loans to replenish working capital.

As part of the Credit consulting service, according to INTERFINANCE specialists, it is offered to support the procedure for obtaining a loan, namely:

- general familiarization with the lending market

- providing information and choosing the most optimal loan program and bank

- assistance in the collection and execution of a package of documents for obtaining a loan

- coordination of a package of documents with the bank

By applying for a loan consultation, you will not only save precious time spent searching for a suitable program, but also receive the most reliable information about the bank and the conditions for obtaining a loan, which often differs significantly from that provided by the bank for advertising purposes.

Directions:

- Lending to businesses (the possibility of making a decision in a short time, before opening an account, accounting for management (unofficial) reporting, groups of companies) and entrepreneurs

- Lending to the population

For individuals:

- credit without collateral and guarantors;

- a loan for urgent needs;

- a loan secured by apartments, foreign cars;

- a loan secured by land and cottages;

- car loan;

- mortgage.

For individual entrepreneurs:

- credit;

- credit line;

- attraction of investments.

Legal entities:

- credit for replenishment of working capital;

- credit for business development;

- a loan for the purchase of real estate;

- a loan for the purchase of equipment;

- a loan to cover cash gaps;

- credit line;

- overdraft lending;

- factoring;

- leasing;

- bank guarantees;

- project financing;

- attraction of investments;

- co-investment.

- Express analysis of financial statements and creditworthiness

- Tax optimization

- Business plans

- Creation of Internet sites

- Increasing credit attractiveness

As practice shows, often a loan is not granted not because the clients are not creditworthy or hide something, but because the client is unable to correctly understand what the bank requires of him.

The essence of the credit consulting service is an independent objective assessment of existing loan offers on the market in order to offer the most advantageous loan plan from the point of view of the borrower (for more details, see Shevchuk D.A. Organization and financing of investments. - Rostov-on-Don: Phoenix, 2006; Shevchuk D.A. Fundamentals of banking - Rostov-on-Don: Phoenix, 2006; Shevchuk D.A. Banking operations - Rostov-on-Don: Phoenix, 2006).

Indeed, dozens of banks now offer loans. Their programs differ in conditions, interest rates, terms and other parameters (see http://www.denisshevchuk.narod.ru for details).

You can do your own market research, spending a lot of time, or you can call loan consultants (or loan brokers) and they will solve your problems.

Investment, banking, financial and credit consulting may include:

- Express analysis of the enterprise and the nature of the project.

- Search for a potential investor or lender.

- Drawing up a necessary package of documents for a specific investor or lender (or a list of required documents).

- Accompanying the consideration of a credit (investment) application.

Specialists will help you to decide on the most convenient form of financing your business, to choose a reliable partner.

There is a market demand for the provision of professional brokerage services to support credit transactions. Realtors do not cope with this duty, not all banks are able to work with clients, and the niche that has arisen is filled by those who have the time and desire for this.

According to experts, out of about 10 people who decide to draw up documents for obtaining a mortgage loan on their own, only 2 go to the transaction. Now help to potential borrowers is offered by mortgage brokers - organizations that provide professional services in selecting the best banking lending program for a client.

According to INTERFINANCE experts, mortgage brokerage is a new and very promising activity for our country, combining the specialties of a realtor and a financier.

According to market participants, the first to enter mortgage brokerage were realtors who founded subdivisions in their firms dealing with consulting services in the field of mortgage lending, and only then specialists in the field of finance and law paid attention to the promising service.

Until now, brokers have not conducted an active advertising campaign. Information about their services is distributed through customers or small advertisements in newspapers and the Internet.

Every year the number of banks that are ready to provide loans to individuals is increasing. The volume of consumer lending is only increasing from year to year. Currently, the most popular are loans issued for the purchase of household appliances, cars. Also, many banks offer express loans that do not involve the intended use of funds.

All major banking loan products are already known and invented. The question is in the range of products that can be offered by one bank. Banks set themselves the task of offering customers the fullest possible range of credit products. Competition in the lending market is very high, and only banks that have achieved the greatest technological effectiveness of transactions at the lowest costs can win (for more details, see http://www.denisshevchuk.narod.ru).

Business lending, according to employees of the INTERFINANCE credit broker (INTERFINANCE MV LLC), despite the unstable state of the economy, implies the possibility of making decisions by some banks in a short time (from 1 to 10-15 days), before opening an account, accounting for management ( informal) reporting, group of companies. Crises are not a hindrance if you use the advice of professionals.

Despite the crisis in the Russian economy, most business lending experts agree that this banking sector in Russia will develop.

Let us consider in detail the currently existing business financing opportunities.

Legal entities:

All types of loans, including:

- overdraft (an unsecured loan for turnovers of up to 50% of the average monthly receipts to the account from third-party counterparties, excluding payments to themselves within the group of companies);

- credit for replenishment of working capital;

- credit for business development;

- a loan for the purchase of a business;

- a loan for the purchase of real estate (including commercial mortgage);

- a loan for the purchase of equipment;

- a loan to cover cash gaps;

- credit line;

- factoring;

- leasing;

- Lombard business lending;

- bank guarantees.

- investments in enterprises of the Russian Federation (including investments in new firms (up to a year) in Moscow).

Applying to credit brokers who have experience in full-time work in banks (preferably in senior positions in specialized divisions), allows you to conduct an express analysis of financial statements and potential creditworthiness, increase maximum lending limits (amounts), optimize taxation, increase credit attractiveness and speed up consideration applications, get the opportunity of priority preferential consideration of applications in banks.

For individual entrepreneurs:

- credit;

- credit line.

Adjustment coefficients (discount) applied in the framework of business lending programs (According to the Deputy General Director of INTERFINANCE (LLC "INTERFINANCE MV") Denis Aleksandrovich Shevchuk):

Real estate objects (buildings, structures, individual premises in a building, unfinished capital structure): no more than 0,8.

Equipment: no more than 0,7.

The subject of pledge may be office and computer equipment, as well as personal property of individuals. Pledge valuation of office and computer equipment, personal property is carried out by a loan officer on the basis of a visual inspection, study of documentation and information on the market value of similar objects and application of a correction factor of not more than 0,6 to the market value.

In the case of a pledge of equipment, trade pavilions (registered as temporary structures) may be considered along with technological, production, etc. equipment. Their collateral value is assessed by applying a correction factor of no more than 0,6 to the market value.

Vehicles: no more than 0,7.

Goods in circulation (goods, finished products, etc.): no more than 0,6.

For goods in circulation, as a rule, the purchase price of these goods by the pledgor without VAT (for purchased goods) / production cost of goods (for goods of own production) is taken as the market value. At the same time, the issue of the competitiveness of this price in the market must be studied by a loan officer.

Prior to accepting property as a pledge, a loan officer, when visiting the place of business, conducts an inspection and verification of the actual availability of property, compliance with data on the quantity and assortment (by type and generic characteristics), checks for the availability of documents confirming ownership. When pledging goods in circulation, certificates of conformity must be checked (selectively, but not less than 10 positions).

Loan amount = collateral amount * discount

The amount of collateral is the liquid market value (which can be sold quickly, usually slightly below the normal market value).

MINIMUM TERMS FOR CONSIDERATION OF APPLICATIONS: from 1-5 days to a month.

FLEXIBLE APPROACH TO COLOR: up to 1000000 rubles without collateral, loans with partial collateral. Any liquid property (including purchased equipment and real estate) is accepted as collateral for other loans. LARGE RANGE OF SUM.

BASIC REQUIREMENTS FOR THE BORROWER:

The presence of a stable and profitable business with a period of actual existence of at least 6 months is mandatory.

The term of official business registration is at least 6 months.

No negative credit history. Absence of facts of non-fulfillment of obligations.

BASIC REQUIREMENTS FOR A BUSINESS OWNER:

Citizenship of the Russian Federation.

Age - from 25 to 60 years old inclusive (for men under 28 years old, the issue is settled with the draft authorities).

No criminal record.

No negative credit history.

Representatives of business today have a sufficient choice among banks that are ready to give "money in growth" and support various business projects. Entrepreneurs only need to be well versed in the conditions and interest rates in order to choose the most beneficial loan program for themselves.

Entrepreneurs are often interested in the question: does the possibility of obtaining a loan depend on the legal form under which a small business is registered. For example, many are sure that there is a prejudice in banks regarding "individual entrepreneurs", it is much more difficult to get a loan with this form of ownership than, say, for a limited liability company (LLC).

However, this setting is far from reality: for banks that are seriously engaged in lending to small and medium-sized businesses, the legal status of the organization does not affect either the number of documents for obtaining a loan, or interest rates, or lending conditions, that is, to all representatives of this sector of the economy. activities are subject to the same requirements.

Some banks have restrictions on other parameters, such as the share of foreign capital, but the form of ownership of the company does not matter. However, there is a limitation for legal entities: the share of the state or non-residents in the authorized capital should not exceed 49%.

The documents that are required for obtaining a loan for small and medium-sized enterprises mainly relate to both the legal status and financial statements. In a bank, for example, you will be required to: a certificate of state registration, a certificate of registration with the tax authority, copies of passports of an individual entrepreneur and guarantors, a copy of the income statement for the last two reporting dates, copies of the pages of the book of income and expenses for 6 months , certificates of the presence or absence of loans in servicing banks.

It is also necessary to provide an extract from the servicing banks on account turnover (debit turnover or credit turnover) for the previous 12 months, as well as information on monthly turnover. Additional documents that banks are often asked to provide are directly related to the company's activities: copies of lease agreements for premises, copies of contracts with buyers and suppliers, copies of documents confirming the ownership of property offered as collateral (contracts, invoices, acts, payment documents, certificates property) and so on.

An individual approach to each legal entity can be explained by a huge number of variations in the parameters of small and medium-sized businesses in modern Russia. Everything is subject to the attention of credit analysts: from organizational and legal documents of the enterprise itself to lease agreements for premises and utility bills. If you divide the documents into groups, then you can select constituent documents, financial documents, documents confirming the ownership of property provided as security, as well as additional documents confirming the conduct of business. Terms of crediting enterprises in each bank are different.

Consideration of an application in banks takes from three working days to several weeks, subject to the provision of a complete package of documents, so enterprises wishing to receive a loan must take this fact into account in advance. Often, clients complain that banks take a long time to consider their applications, but from practice I can say that usually such clients do not follow the instructions of the bank and do not fulfill everything that is asked of them on time, thereby delaying the decision-making process on the possibility of lending.

Due to the focus of most banks on the "individual approach" to each borrower-representative of small or medium-sized businesses, entrepreneurs have the opportunity to vary the interest rate. You should think about obtaining a loan for your company in advance and cooperate as much as possible with credit analysts on issues related to documents: in this case, you can choose the most favorable lending conditions for the company.

Significant time savings, and often many other costs, will allow you to get a timely appeal to credit brokers, but only if in the staff of such a company all employees previously worked in banks in senior positions. The abundance of so-called "certified brokers" who listened to advertising lectures in ordinary companies, seriously discredits the profession of a credit broker. Ideally, the more banks a credit broker worked in, the better.

List of documents for the Borrower

1. Questionnaire - application in the form of the Bank.

2. Passport(1) for individuals who are:

- business owners;

- participants in the transaction (borrower, guarantors);

- managers (having the right of first signature) of legal entities belonging to the Client's group of companies.

For men under 28 years of age, an additional copy of the military ID.

3. Certificate of state registration(3) (making an entry in the Unified State Register of Legal Entities / EGRIP).

4. Certificate of registration with the tax authority(3)

5. Licenses(3) and/or other documents giving the right to carry out activities.

6. Constituent documents(3)(Articles and Memorandum). Additionally, if applicable: Decisions on making changes and/or additions to the constituent documents, as well as certificates of state registration of such changes and/or additions.

7. Documents confirming ownership(3) on the personal property of business owners.

Financial documents

1. Financial (tax) reporting(3) with a stamp, or a postal receipt and a description of the attachment, confirming the delivery to the IMTS, as of the last reporting date (for the last reporting period).

1.1. Balance sheet (Form No. 1) and Gains and losses report (Form No. 2), or

1.2. single tax return, paid in connection with the application of the simplified taxation system, as well as a receipt (payment order) confirming the payment of a single tax for the last period, or

1.3. Tax return for a single tax on imputed income for certain types of activities, as well as a receipt (payment order) confirming the payment of a single tax for the last period.

2. Income and expense ledger(3) organizations and / or individual entrepreneurs applying the simplified taxation system or being UTII payers for the last 3 months.

3. Accounting documents (statements) containing information on receipts to the cash desk and to settlement accounts broken down by banks for 6 months monthly.

4. Breakdown of receivables and payables(1) no later than the 1st day of the month in which the application was submitted.

6. Certificate of commitment(1) in the form of the Bank no later than on the 1st day of the month in which the application was submitted.

7. List of property used in business and inventory items(1) no later than the 1st day of the month in which the application was submitted.

Documents confirming economic activity

1. Contracts (agreements) with main suppliers and consumers(3). At least 6 (at least 3 with suppliers and at least 3 with consumers) with the largest counterparties in terms of settlements.

2. Documents confirming the right to use the premises(3)(warehouse, office, points of sale).

Forms of submission of documents:

(1)Original

(3) A copy certified by the organization / individual entrepreneur

The responsible officer of the Bank may additionally request other additional documents necessary for making a decision on granting a loan.

A business financing option is a loan secured by housing for any purpose, essentially a mortgage option. Quite often, business owners use this product. There are two options: mortgage of an apartment and mortgage of a house (cottage).

The residential building that is the subject of pledge must meet the following requirements:

1.1. be located in a settlement on the territory of which other residential buildings suitable for habitation are located;

1.2. have an access road that provides year-round access to the land plot on which the residential building is located, by motor transport;

1.3. be suitable for permanent habitation;

1.4. have a constant power supply from an external source through the connected network from the power supply organization;

1.5. be provided with a gas, steam or stove heating system, as well as cold water supply;

1.6. be in proper technical condition and not have significant defects in structural elements and engineering equipment, which can subsequently lead to an accident at home;

1.7. pass the cadastral registration, comply with the floor plan issued by the body carrying out the technical inventory of the property, which is determined on the basis of the data of the valuation report made by a professional appraiser;

The land plot that is the subject of pledge must meet the following requirements:

- have a permitted use (intended purpose): for gardening, housing or summer cottage construction;

- the requirements specified in paragraphs 1.1., 1.2. and 1.9.

General requirements. The subject of collateral can be both the Residential Premises, for the purchase of which a mortgage loan was provided, and the existing Residential Premises.

1. The Residential Premises should not be under arrest or prohibition, should not be encumbered with the right of third parties, with the exception of the right of residence, there should be no disputes regarding the Residential Premises. If a person who is not one of the owners (pledgers) of the mortgaged Residential Premises plans to be the sole borrower under the loan agreement, then it is necessary to demand that one of the owners (pledgers) of the Residential Premises be involved as the second borrower (co-borrower).

2. The dwelling is a separate apartment or a separate Residential building for permanent residence (cottage or semi-detached house (townhouse)). The rooms of a communal apartment can only be pledged if, to secure one loan, all rooms (premises) of the communal apartment are pledged, i.e., in aggregate, the pledged rooms (premises) will constitute a single Residential Premises.

3. The Residential Premises is connected to electric, steam or gas heating systems that provide heat to the entire area of ​​the Residential Premises, or has an autonomous life support system.

4. The dwelling has entrance doors, windows and a roof (for apartments on the upper floors).

5. When granting a loan secured by existing housing, Residential Premises shall not be accepted as collateral in the following cases:

- When the owners (one of the owners) of the Premises are minor children;

- When persons who are not members of the pledger's family are registered in the Residential Premises for a long period (1 year or more).

6. When one of the owners (pledgers) of the Residential Premises is a person over 65 years of age, the mortgage agreement is subject to mandatory notarization.

7. The building in which the subject of pledge is located must meet the following conditions and requirements:

a) is located in Moscow or the Moscow Region;

b) is not in emergency condition;

c) not be registered for major repairs (if information is available);

d) is not in plans for reconstruction or demolition (if information is available);

e) have a reinforced concrete, stone or brick foundation;

f) depreciation of a building built earlier than 1970 should not be more than 70%.

8. Ownership of the Residential Premises must be confirmed by the relevant title documents (certificate of ownership, registered contract of sale of the Residential Premises, barter agreement, etc.), drawn up in accordance with the requirements of the current legislation.

9. Technical documentation (explication, floor plan) must comply with the data specified in the USRR. If the Residential Premises is re-equipped without an appropriate permit, such Premises can be accepted as a pledge only on the condition that the Pledgor legalizes the redevelopment within 6 months from the date of the conclusion of the mortgage agreement (the emergence of a mortgage by virtue of law), and if it is impossible to legalize the redevelopment, the Pledgor is obliged, within 9 months from the date of conclusion of the mortgage agreement (the emergence of a mortgage by virtue of law), to bring the Residential Premises into a state corresponding to the data specified in the technical documentation.

10. When acquiring (mortgaging) a separate Residential House, the land plot located under such a house is simultaneously acquired, registered in a mortgage. Ownership of a land plot must be confirmed by the relevant title documents (certificate of ownership, registered land purchase and sale agreement, other agreement), drawn up in accordance with the requirements of the current legislation. The original cadastral plan of the land plot must be attached to the document for the land, which must be pledged together with the Residential Building.

10.1. If the land plot is provided on a leasehold basis, then simultaneously with the house, the leasehold rights to the land plot must also be pledged. The lease agreement for a land plot must be concluded for a period not less than the term of the loan agreement, or contain an indication of the extension of the agreement for a new term. If the lease agreement contains a condition on obtaining the consent of the lessor to pledge the rights to lease the land plot, then such consent must be obtained before the conclusion of the pledge agreement, if such a requirement to obtain the consent of the lessor does not contradict the current legislation.

10.2. If the mortgagor does not have the right of ownership or the right to lease the land plot located under the Residential Building, then when lending against the security of the existing housing, such property is not accepted as security.

When lending secured by purchased housing, the Residential House can be accepted as security, provided that the seller of the Residential House has the right to lease the land plot located under the Residential House.

The crisis in the American mortgage market provoked a global crisis in the money market. Many Russian banks found themselves in a difficult position. The lack of financial resources and their widespread rise in prices have led to insufficient funding. As a result, the financial resources of a number of banks allocated for the issuance of mortgage loans were exhausted.

Due to the inability to quickly replenish their potential, many banks hastily tightened lending conditions for mortgage transactions, and some even temporarily abandoned mortgages. A frequent occurrence in today's practice of banks is the delay in the consideration of an application for a loan without explaining the reasons. At the same time, many borrowers who had already received the bank's approval for issuing a loan were faced with the fact of raising the rate on a mortgage loan.

Not only the banks themselves faced problems, but also potential borrowers who were forced to abandon real estate purchase transactions due to sudden bank failures and delays in issuing loans.

It is not uncommon for approved borrowers to wait for their money for two or three or more months. In the context of rising real estate prices, a delay of several months leads to a significant increase in the cost of the apartment.

Banks, which were less focused on foreign borrowing, relying on their own resources when issuing mortgage loans, continue the process of lending to mortgage borrowers. In general, a sufficient number of banks still offer very competitive conditions, but they have raised mortgage rates, significantly increased the down payment and tightened lending conditions.

A loan broker is essentially a financial lawyer. You can go to court yourself - or you can hire a lawyer, you can get a haircut at home at the mirror yourself - or you can go to a specialist’s hairdresser, someone repairs his Cossack himself - and someone gives his Mercedes to a car service. It is a mistake to think that a loan broker is a magician and distributes loans to everyone. If he is a specialist, has a specialized higher education (and not just courses) and experience of real full-time work in banks (preferably in different and relevant departments in senior positions, and not just internships), then he will significantly increase the likelihood of a positive loan decision (so how a competent lawyer will increase your chances in court and in the preparation of legal documents) and the speed of decision making.

I can add that during a crisis it is useful to spend your free time on self-education, studying economic and legal literature. Bank employees have a habit of getting angry if loan applicants are illiterate in economic and legal matters. A broad outlook allows you to find a common language with bankers faster, because banking has long been considered one of the most highly intelligent professions, some employees have 2-3 higher educations and constantly improve their knowledge.

There are many scammers, who, as a rule, do not have even a minimum experience in banks before, offering a guarantee of 100% obtaining a loan: this is a 100% fraud or an outright crime that will be XNUMX% revealed sooner or later (with corresponding consequences for both the client and the false assistant) . This is clear to any experienced banker. In any bank, business loans and mortgages (and often other types of loans) are issued after the decision of the credit committee, this is a collegiate body, while the client is previously checked by various bank services. One person, even a big boss (unless, of course, this is the owner of the bank) cannot, by definition, make such decisions alone, especially an intermediary. A competent intermediary with full-time experience in banks can significantly increase the likelihood of approval - this is already a reality, but will never guarantee a XNUMX% loan. Its role is educational and lobbying. Credit brokerage is useful to everyone. On the one hand, the broker simplifies the procedure for obtaining a loan for clients, on the other hand, it attracts new "quality" clients to banks (www.deniskredit.ru).

Glossary of definitions and terms

Currently, when conducting real estate transactions, in business and economic literature, concepts and terminology are mainly used, either having a specific interpretation in the current legislative and regulatory acts, or generally accepted and unambiguously understood concepts in society. Below are the most commonly used real estate terms in alphabetical order, with the exception of those that are covered in detail in this tutorial.

Transfer deed - a document sometimes used instead of a mortgage, depending on the nature of the legislation in relation to real estate. The act of transfer certifies the transfer of title to the land to a subsidiary (mortgage company or bank) as collateral, which provides a guarantee of payment of the debt on conditions and which is returned after the payment of the debt. In case of default on the part of the borrower, the trustee has the right to sell the land to pay off the debt.

The act of purchasing a property - a legal document certifying the transaction of purchase and sale of a property. The act of purchasing a property contains, as a rule, the details of the seller and buyer of the property, the designation of the property, adopted in the documents of the registration system, the details of the witnesses of the transaction. In many countries that maintain a legal cadastre, the registration of the act of purchase and sale of a property is carried out by a special service at a lower court or a special institution with court rights, which, simultaneously with the registration of the act, draws up the title (document of ownership) of the new owner of the property.

Loan amortization - the process of repaying a loan by making regular payments of principal and interest.

Underwriting - analysis of credit and interest risks on a mortgage loan; preparation of an opinion on the interest rate and credit conditions corresponding to the level of risk.

Land lease - a form of land use, in which the owner of the land transfers his land plot for a certain period to another person (tenant) for running an economy on it for a certain remuneration.

Tenant - a legal or natural person legally receiving a real estate object for temporary use.

Rent - the fee paid by the tenant to the landlord for the use of the rental property. It includes depreciation deductions from the cost of the leased object, as well as a part of the profit (income) that can be received from the socially necessary use of the leased property (rent interest).

Landlord - a legal or natural person who is the owner or balance-holder of an object (real estate) and rents it out for temporary use to the tenant on a contractual basis.

Public auction - a method of sale in which the property is previously put up for inspection by potential buyers. The general conditions of sale are determined by the seller, and the buyer is the person who offered the highest price for the property being put up during the auction.

Real estate appraisal base - the type of value of the real estate object, in the content of which the purpose and method of evaluation are realized.

Book value - the cost of fixed assets of an economic entity (enterprise), i.e., long-term assets on its balance sheet. Calculated as the original cost of acquiring or creating the property for which it was listed on the balance sheet, less accumulated depreciation.

Fixed asset balance - a balance drawn up by an economic entity that characterizes the receipt, expenditure and disposal of fixed assets (buildings, structures, equipment) for a certain period of time.

Improvement - a set of works on:

- engineering preparation of the territory, arrangement of roads, development of communication networks and construction of water supply, sewerage, power supply, etc.;

- improvement of the microclimate, protection from pollution of the air basin, open water bodies and soil, sanitary cleaning, noise reduction, etc.

Landscaping is carried out in order to bring a particular territory into a condition suitable for construction and normal use for its intended purpose, to create healthy, comfortable and cultural living conditions for the population.

Secondary mortgage market - a market where the purchase and sale of the first mortgages is carried out, which provides the lender with the opportunity to sell the loan before the full maturity date.

Sample - part of the totality of economic objects or indicators selected for study in order to draw a conclusion about the entire population. The sample must be drawn up in such a way, in such a quantity, that it is statistically representative (representative), that is, it reflects the population under study. For example, in order to study the demand, the supply of prices in the market, it is enough to examine only certain segments of the market.

Disposal of property, plant and equipment - liquidation, sale, transfer to other economic entities, death from natural disasters of objects included in the composition of fixed assets.

Warranty -

- guarantee, ensuring the fulfillment of obligations. The seller usually presents a guarantee of quality, the buyer - payment of the contract price; by agreement of the parties, a third party, more often a well-known company, a bank, can be a guarantor of the fulfillment of contractual obligations;

- the statutory obligation of the seller to be responsible for the material defects of the object and for the fact that the property is free from debt obligations and is not owned by third parties.

General project manager - an investment and construction company, which is approved as the responsible executor of the ongoing mortgage lending program and is vested with the relevant rights to organize and carry out investment activities with the participation of banks, insurance companies and third parties. The Fund can act as the general manager of the project.

General plan - part of the project, containing a comprehensive solution to the issues of planning and improvement of the construction site, placement of buildings, structures, transport communications, engineering networks, organization of economic and consumer services systems.

general contractor - with the consent of the customer, he can involve domestic and foreign firms in fulfilling his obligations, but at the same time he always remains responsible for the performance of work by subcontractors.

The general contractor usually participates together with the general supplier in the delivery of the complete equipment or the facility as a whole to the customer.

Government duty - fees collected in accordance with the established state procedure and in amounts by specially authorized institutions (courts, state arbitration, notary offices, etc.) for performing actions in the interests of legal entities and individuals and issuing documents of legal significance and related to real estate.

Property valuation date - the date as of which it was assessed.

Decouver - the difference between the valuation of the property and the sum insured, left on the insurance market.

Discounting - a widely used method in the evaluation of real estate and the selection of investment programs, the essence of which is to bring multi-temporal investments and cash receipts to a certain period of time and determine the rate of return on investment; conversion to present value of a future investment stream.

bona fide owner - one who did not know and, due to circumstances, could not know about the illegality of his legal possession.

Power of attorney - a document issued to a legal or natural person, which defines his authority to make transactions or other lawful acts on behalf of another person (principal).

The power of attorney is urgent, the validity period is indicated in the document itself. The validity of a power of attorney is also terminated due to its cancellation by the principal, liquidation of a legal entity and other cases provided for by law. There are three types of powers of attorney:

- one-time - to perform one specific action;

- special - to perform any homogeneous actions;

- general or general - for the general management of the property of the principal, the conclusion of contracts, etc.

Contract - an agreement between the parties under which property is transferred, work is performed or a service is provided. The contract includes three mandatory, sequentially developing stages: conclusion, execution and termination (responsibility), i.e., the establishment, change and termination of certain property related non-property rights and obligations

The rules on bilateral and multilateral transactions apply to the contract, and the general provisions on obligations apply to obligations arising from the contract, unless otherwise provided by the rules on certain types of contracts contained in the Civil Code.

The parties may conclude a so-called mixed contract, which contains elements of other contracts.

The contract is considered valid if the parties have reached agreement on all its essential terms.

Citizens and legal entities are free to conclude contracts and coercion is not allowed, except in cases where the obligation to conclude a contract is provided for by the Civil Code of the Russian Federation, by law or by a voluntarily accepted obligation.

The contractual relationship consists not only of the essential terms of the contract, but also of all relevant circumstances, including previous contracts, negotiations and correspondence, the practice established in the relationship of the parties, business practices, and subsequent behavior of the parties. Before the conclusion of the main contract, a preliminary contract may be concluded, which allows to establish the subject of the contract and contains all the preliminary conditions for this agreement.

From a legal point of view, there are different types of contracts. For example, in a mortgage lending system, the following types of agreements can be concluded through a bank: a loan agreement, a loan agreement, a real estate purchase and sale agreement, and a construction contract.

Depending on the type of contract, the relationship of the parties will be to a certain extent regulated by the current legislation of the Russian Federation or other regulatory documents in force on the territory of the country.

Loan agreement - an agreement under which one party (the lender) transfers money or real estate objects into the ownership of the other party (the borrower), and the borrower undertakes to return to the lender the same amount of money (loan amount) or an equal amount of other things received by him of the same kind and quality.

Credit agreement - an agreement under which a bank or other credit institution (creditor) undertakes to provide funds (credit) to the borrower in the amount and on the terms stipulated by the agreement, and the borrower undertakes to return the amount of money received and pay interest on it.

Residential lease agreement - an agreement under which one party - the owner of the residential premises or an authorized person (landlord) - undertakes to provide the other party (tenant) with residential premises for a fee for possession and use for living in it.

Debtor - a party to an obligation, from which the other party - the creditor has the right to demand a certain action (transfer of a property, performance of work or services, payment of a debt) or refraining from a certain action.

Shared ownership - a part of income, property, other valuables, which one of the participants in the common cause, collective owners, heirs is entitled to claim. The measure in which a participant in a common business contributes his own resources, funds, called equity participation.

Market volume - the possible annual sales volume of a certain type of real estate at the current price level, depending on the degree of development of this market by competitors, the elasticity of demand, changes in economic conditions, price levels, quality of objects and advertising costs.

Housing - the area of ​​the national economy, including the construction and reconstruction of dwellings, structures and elements of engineering and social infrastructure, management of the housing stock, its maintenance and repair.

Housing law - a part of civil law that regulates the procedure for providing residential premises, conditions of use and disposal, as well as changes and termination of their use.

Housing Association - a partnership of owners of residential and non-residential premises in apartment buildings with the establishment of conditions for the joint use of inter-apartment stairs, elevators, corridors, roofs, technical basements, non-apartment engineering equipment, adjacent territory and other common areas, registered as a legal entity.

Housing fund - the totality of all residential premises, regardless of the form of ownership, including residential buildings, specialized houses (hostels, hotels - shelters, houses of a mobile fund, special homes for the elderly, boarding schools for the disabled, veterans, etc.), apartments, office premises, other living quarters in other buildings suitable for habitation.

Will - an order of a citizen regarding the property belonging to him in case of death, made in the form established by law (notarial or equivalent to it).

Customer - a legal or natural person for whom a real estate object is being built. The customer is obliged to present the construction site to the contractor, to carry out timely financing of construction, to exercise control and technical supervision over the compliance of the volume, cost and quality of work.

legal possession - the actual possession of a real estate object, which is always based on some legal basis that arises on the basis of a law, contract, administrative act or court decision.

Property liquidation costs - expenses associated with dismantling, dismantling and other operations for the liquidation of real estate.

Landowner - a legal or natural person who has the right to own a certain piece of land. Land ownership and land ownership may not be the same.

Land parcel - a part of the territory limited on the ground and / or on the plan: along the surface of the earth's crust by the boundaries of the land plot, a fixed height and volume of airspace and a fixed depth and volume of subsoil.

Land use - use of a land plot established by law (state farms, collective farms).

Land management - Laws, rules, norms of purchase and sale, inheritance, use of land.

Export - decrease in the initial cost of real estate in the process of their use.

property law - real right: the right to use any property in a certain way, the right to receive income from the use of real estate.

Investment - long-term investments of capital, property and intellectual values ​​in objects of entrepreneurial and other types of activity in order to make a profit and (or) achieve a positive social effect; real estate acquired for income or profit.

investment property - property (real estate) that is used to generate income in the form of rent, income from resale, etc.

Investment value of the property - the total cost of paying for pre-project, design and construction and installation works and services of the general manager of the project.

Investor -

- a person who invests in real estate to generate income;

- the holder of the mortgage for whom the bank provides servicing of the mortgage loan.

Infrastructure - a complex of farms and services serving the sectors of the national economy. For example, the infrastructure of the construction system includes communications and life support facilities for employees of construction enterprises.

Limitation of actions - the period established by law for the protection of the right on the claim of the person whose right has been violated.

Land cadastre - a systematized set of information about the natural, economic and legal status of lands. Includes a description of land, plots, their area and location, configuration, soil quality, land valuation. The cadastre also indicates who is the owner of the land.

Cadastral survey - geodetic work on the land plot, which determines the description of the boundaries of land users and boundary marks, the area of ​​built-up and landscaped areas, the presence of hard surfaces and lawns, the characteristics of buildings, the presence or absence of disputes over the boundaries of the land plot.

Cadastral land management - a set of documented technical, legal and economic characteristics of a land plot (real estate object), which are the basis for registration of title documents.

Capital investment - investing in the creation and reproduction of fixed assets of the enterprise; costs, as a result of which there is an increase in fixed assets (construction work, installation work, purchase of equipment, laying and growing perennial plantations).

Sources of capital investment financing can be: federal and local budgets; loans from banks and other credit institutions; own funds of legal entities and individuals; funds of foreign states, as well as foreign legal entities and individuals.

Code - a synthesized single legislative act regulating any area of ​​public relations.

Condominium - a partnership of owners of residential premises in apartment buildings with the establishment of conditions for joint ownership and use of inter-apartment stairs, elevators, corridors, roofs, technical basements, non-apartment engineering equipment, adjacent territory and other common areas; the legal form of ownership, according to which the object is divided into elements of individual ownership and elements of joint ownership.

Conjuncture - a set of features that characterize the current state of the economy in a certain period, as well as the current economic situation on the market, which is characterized by the relationship between supply and demand, price levels, commodity prices, portfolio of orders for the industry and other economic indicators.

Loan ratio - percentage expression of the ratio of the amount of the mortgage loan to the value of real estate (the value is defined as the lower limit of the sale price or appraised value).

Plot building factor - coefficient showing the ratio between the area of ​​the building and land.

Creditor - a lender, a legal or natural person lending money or other valuables, as well as a person to whom economic entities owe money.

Liquidity - ease of implementation (turning real estate into cash); market capacity and its ability to absorb sudden changes in supply and demand without a corresponding large price fluctuation.

Listing - an agreement between the owner of a property and a licensed real estate broker, under which the broker acts as an agent for the sale of real estate, and the owner agrees to pay a commission to the broker.

Land surveying - Establishment of land use boundaries.

municipal property - objects of immovable property owned by municipalities.

municipal law - legal education in the system of law, a set of legal norms governing relations arising in the process of organizing and operating local self-government in cities, rural settlements and other territories.

Municipal housing stock - a fund owned by a district, a city, their administrative-territorial entities, as well as a departmental fund under the full economic management of municipal institutions.

Inheritance - receiving on the basis of kinship or by will the ownership of real estate, cash, securities, jewelry, etc., left after the death of the owner. Legally, inheritance is formalized by a certificate of the right to inheritance, issued by a notary office at the place of residence of the testator.

Real estate -

- a legal concept that means a set (package) of property rights to real estate, including the right to own, use, dispose, appropriate income from ownership, and income from the disposal of real estate;

- the unity of the physical body - real estate and ownership of it.

Non-residential premises - the premises of the building, which is used for any purpose, except for the residence of individuals in it.

Construction in progress - an indicator used to indicate the situation when construction and installation and other works have been stopped at a construction site, and the object is "frozen" for a certain period of time.

Incomplete construction leads to serious socio-economic consequences - resources are "dead" that have not given any return for many years, equipment is morally and physically aging, technology is becoming obsolete.

Construction in progress is determined by the volume of capital investments that have been disbursed at the facilities at a certain point in time, and is accounted for on the balance sheet of customers.

Intangible assets - assets used for a long period in the activities of an economic entity and generating income. These are the rights to use real estate objects, including land plots, natural resources. Patents, licenses, know-how, software products, monopoly rights and privileges (including licenses for certain activities), trademarks and trademarks.

Depreciation rate - the percentage of the annual depreciation amount to the initial cost of fixed assets.

Capitalization rate - the ratio of the market value of the property to the net income from its operation.

Commitment - a civil legal relationship, by virtue of which one person is obliged to perform certain actions in favor of another person: transfer real estate objects, perform work, pay money, etc., or refrain from a certain action.

Objects of relations in the field of real estate - rights to land plots and other real estate objects, as well as obligations arising in connection with the rights to real estate objects.

Objects of ownership - enterprises as property complexes, land plots, garden allotments, buildings, structures, equipment, raw materials and materials, money, securities, other property for production, consumer, socio-cultural and other purposes, as well as products of intellectual and creative work.

Restrictive obligations - restrictive clauses in the contract of sale of real estate, that is, the obligation not to change the appearance of the house, not to erect any buildings without the consent of the seller, not to build structures outside the building line, not to carry out hazardous activities, not to allow restrictions on the rights of neighbors to use lighting and communications, etc.

Property Description - Reflection of real estate in registration documents. It is required to determine the material object of real estate, to establish the boundaries of a piece of real estate, to calculate its area, to characterize the position of a piece of land in relation to neighboring ones, and when transferring title from one owner to another. Description of real estate is the basis for identifying an object of turnover in the real estate market, and must accurately reflect the composition of real estate, taking into account its components.

Option -

- the right to purchase or lease real estate in the future on the terms currently agreed;

- the right granted by the owner of the real estate to the other party to buy or rent the property for a certain period of time at a set price and on set conditions;

- the ability to choose the method of fulfilling an alternative obligation;

- a preliminary agreement on the conclusion of the contract in the future within the time limits stipulated by the parties.

Land acquisition - provision of lands (land plots) in accordance with the procedure established by the land legislation and in the amounts determined by regulatory documents.

Offer -

- an offer to conclude a contract in relation to a specific subject of bidding on the terms specified in the tender documentation;

- any proposal to conclude an agreement (including a preliminary one) coming from one of the parties.

Real estate appraiser - a person with training, experience and qualifications for property valuation

Debt transfer - a transaction, as a result of which, with the consent of the creditor, the debtor in the obligation is replaced by a new person who accepts the obligation of the original debtor.

Land plot plan - a drawing, which shows in a reduced form a horizontal projection of the exact dimensions and shape of the land plot, its area and orientation relative to the meridian. There are contour, i.e., without the image of hills, ravines, etc., and topographic - with the image of the terrain.

situational plan - a plan showing the location of the property in relation to the nearest settlements, sources and external networks of energy, heat and water supply, sewage facilities and networks, as well as the main features of the natural conditions of the territory in the area where the property is located.

Contract bidding - a form of placing orders for construction, providing for the selection of a contractor to perform work and provide services on the basis of a tender.

Development rights - any rights stipulated by the municipal (local) authorities or the developer, in terms of conducting new construction.

Law - a system of generally binding norms recognized and protected by the state.

Property rights - the power of the owner to own, use and dispose of the property, including the right to appropriate income from ownership and income from its use.

Land ownership - the right of a person who owns a land plot to sell it, donate it, give it as a pledge or lease it and dispose of it in any other way insofar as the relevant lands are not excluded from circulation or are not limited in circulation on the basis of the law.

Right of private property - the right of everyone to own real estate, own, use and dispose of them both individually and jointly with other persons. The right of private property is protected by law. No one can be deprived of the property belonging to him, except by a court decision. The expropriation of an immovable property for state needs may be carried out only on the condition of prior and equivalent compensation.

legal norm - a generally binding rule of conduct in society, recognized and protected by the state.

Legal Status - the sum of rights and obligations belonging to the subject of law.

Legal capacity of a citizen - the ability to have civil rights, bear responsibility and fulfill the duties provided for by law, recognized equally for all citizens.

Legal capacity of a legal entity - the ability of a legal entity to have civil rights corresponding to the objectives of the activity provided for in its constituent documents, and to bear the obligations associated with this activity.

Entrepreneurial activity - an independent activity carried out at one's own risk, aimed at systematically obtaining profit from the use of a real estate object, the sale of goods, the performance of work or the provision of services by persons registered in this capacity in the manner prescribed by law.

Housing privatization - free transfer to the ownership of citizens on a voluntary basis of residential premises occupied by them in state and municipal housing stocks, and for citizens who have rented occupied residential premises - at the place of hiring residential premises.

Privatization by competition - acquisition from the state into private ownership by individuals or legal entities of a privatization object or the right to lease a real estate object included in the privatization object, when buyers are required to fulfill certain conditions in relation to the privatization object. The right to purchase the privatized object is transferred to the buyer, whose offer fully meets the conditions of the tender and contains the maximum price.

Principles of real estate appraisal - methodological rules on which the real estate appraisal process is based and allow the appraiser to correctly take into account the influence of the whole variety of factors inherent in the real estate market on the value of the property.

Acquisitive prescription - conscientious, open and uninterrupted possession of a real estate object, as one's own, for fifteen years, or other property as one's own for five years, as a result of which a citizen or legal entity that is not the owner of this property acquires the right of ownership to it.

Design and estimate documentation - a set of documents (calculations, drawings, plans for the receipt and expenditure of funds, etc.) necessary for the construction of a newly built or reconstructed (repaired) facility. The design and estimate documentation, on the one hand, is a set of documents that are necessary for the construction of an object, on the other hand, a financial plan that is used to value future operations, sources of funds and the procedure for covering costs.

Industrial real estate - real estate objects, buildings and facilities for industrial purposes.

Interest rate - fees charged by banks for loans. The interest rate is the basis of the cost accounting of banks. The interest rate depends on the size of the loan, its maturity, the annual rate of payment, the ratio of supply and demand in the money market, as well as the degree of risk that a credit institution bears by lending a certain amount to the debtor.

Interest risk - the risk of a negative difference between the level of interest paid by borrowers on issued mortgage loans and the level of interest paid by mortgage banks or mortgage intermediaries to investors.

public records - a state-supported system of documents certifying the existence of registered property interests in real estate and thus serving as the basis for protecting these interests.

Permitted use - an exhaustive list of purposes for which a real estate object, including a land plot, can be used, all real duties that burden it, easements and other restrictions on use, developed on the basis of zoning schemes for the territory and individual real estate objects.

Reversion - return of the property to the original owner.

Register of private property - an integral part of the property register, which is a data bank on owners (individuals and legal entities) and on private property objects - enterprises as property complexes, buildings, structures, structures, non-residential premises - in a certain territory.

Reconstruction - a set of works related to the change in the main technical and economic indicators of the property. In this case, it can be carried out:

- redevelopment of premises, erection of add-ons, add-ons, extensions to buildings, and if necessary, their partial dismantling;

- increasing the level of technical equipment of buildings, including external networks (except for backbones);

- replacement of worn-out and morally obsolete structures and engineering equipment with modern ones that improve the performance of buildings and facilities;

- measures that improve the architectural expressiveness of buildings, as well as the improvement of the territories adjacent to the buildings.

Rent - regularly received income from capital, property or land, which does not require entrepreneurial activity from the recipient.

Restitution - restoration in the former legal property status; returning the property to its rightful owner.

Risk - the possibility of losses caused by volatility or volatility. The possibility that an investor investing in real estate will not receive the expected returns

Market -

- a set of individual segments of consumers that differentiate consumer demand and are formed as a result of a complex interaction of economic, demographic, social and psychological factors;

- the sphere of the economy in which the process of commodity circulation of goods into money and the reverse transformation of money into goods takes place;

- a set of interrelated acts of sale and purchase of a mass of goods produced in various areas of the economy;

- a system of economic relations that develop in the process of production, circulation and distribution of goods (services), as well as the movement of funds, which are characterized by the freedom of subjects in choosing buyers and sellers (counterparties), determining prices, forming and using resource sources;

- the sphere of circulation of goods and capital, as well as the movement of labor and other factors of production.

Buyer's market - the situation on the market when the supply of producers and sellers of real estate objects exceeds the demand for them at existing prices, as a result of which prices for real estate objects are reduced and buyers can achieve very favorable conditions and prices.

Seller's Market - a situation on the market where sellers have an advantage, since the buyers' needs to purchase real estate at the offered prices exceed the sellers' ability to saturate the market.

Unauthorized building - a residential house, building, structure or other real estate object created on a land plot not allocated for these purposes in the manner prescribed by law and other legal acts, or created without obtaining the necessary permits for this or with significant violations of urban planning and building codes and regulations .

Market segment -

- a set of consumers who respond in the same way to the same set of incentives;

- a part of the market characterized by a group of buyers that is homogeneous in its economic behavior.

Securitization - issue of securities for real estate financing, a means of increasing liquidity and reducing transaction costs in the real estate market.

Estimated cost of construction of buildings and structures is the amount of money required for its implementation in accordance with the project. The estimated cost of construction of buildings and structures is the basis for:

- determination of the amount of capital investments;

- construction financing;

- formation of free (contractual) prices for construction products;

- settlements for completed contract construction and installation works;

- payment of expenses for the purchase of equipment and its delivery to construction sites;

- placement of other costs at the expense of the funds provided for by the consolidated estimate.

Based on the estimate documentation, accounting and reporting, evaluation of the financial activities of developers and contractors is carried out. In addition, the estimated cost determines the book value of the fixed assets put into operation for the constructed enterprises, buildings and structures. The basis for determining the estimated cost of construction are:

- project and working documentation, including drawings, explanatory notes;

- statements of volumes of construction and installation works;

- specifications and statements for equipment;

- the main decisions on the organization of construction;

- current estimated (including resource) standards;

- Selling prices for equipment, furniture and inventory.

Estimated standards - the generalized name of a set of estimates, norms, rates and prices, combined into separate collections. Together with the rules containing the necessary requirements, they serve to determine the estimated cost of construction and reconstruction of buildings and structures, expansion and technical re-equipment of enterprises in all sectors of the economy.

Estimated standards are divided into the following types: federal (republican); departmental (sectoral); regional (local); user's own regulatory framework.

In conjunction with part 4 of the SNiP "Estimate norms and rules", which contains in its composition the basic rules for the development and application of the estimated cost of construction, all estimated standards form a system of pricing and estimated rationing in construction.

Estimated prices - used in construction to calculate the estimated cost. The system of estimated prices includes average regional (belt, zonal) prices for building materials, products and structures; prices for the work of construction machines and mechanisms; tariffs for the transportation of goods; wage rates for construction workers; individual estimated prices; on local and imported materials, products and structures. Estimated prices are set for a certain period as part of the estimated-normative (normative-information) base of the pricing system and estimated rationing in construction.

Property Owner - an individual or legal entity that owns the rights to own, use and dispose of a real estate object within the limits established by law, objective ownership rights to a real estate object.

Social norm of housing area - the size of the housing area per person, within which compensations (subsidies) are provided for housing and utility bills. It is equivalent to the minimum amount of provision of residential premises, which is established by the state authorities depending on the achieved level of housing provision, family composition, the types of residential premises used in the houses of the social housing fund and other factors.

initial cost - the amount of costs for the acquisition of a property, which consists of the costs of construction and installation works, the costs of design and survey work, the costs associated with the acquisition of a land plot and the resettlement, if necessary, of citizens living on this site, as well as the maintenance of technical supervision bodies for capital construction.

Title Insurance - protection of the owner from financial losses possible in the event of the presence of third party rights or any encumbrances associated with the property that exist but are not known to the owner by purchasing an insurance policy. Title insurance is the transfer of possible risk from the owner or tenant to the insurance company.

Sublease - transfer of a part of the leased property for rent to a third party or group of persons, while the tenant acts as a secondary lessor.

Subjects of property rights (subjects of real estate relations) - owners of real estate objects: citizens, legal entities, authorized bodies of representative and executive state power of the Russian Federation, constituent entities of the Russian Federation, authorized bodies of local self-government.

Zoning scheme - an integral part of the master plan and planning and development projects of the settlement, which determines the functional purpose of the territory and individual real estate objects.

Surveyor - Specialist in real estate appraisal, management and development.

Current return - the ratio of current cash receipts from investments to investment costs.

Tender - a competitive form of contract bidding, which is a competition of offers submitted by applicants in terms of their compliance with the criteria contained in the tender documentation; an offer for construction, facility management, provision of services or supply of goods during bidding; closed competition.

tender documentation - documentation developed by the tender committee and containing technical and commercial parts. The technical part of the tender documentation is:

- description and general information about the subject and object of the auction. It indicates the location and purpose of the facility, its main technical and economic data, the availability of external infrastructure, local building materials, access roads, as well as construction time;

- information on the conduct and results of engineering surveys at the construction site of the facility;

- technical data of the facility, general provisions, master plan, architectural and construction part, including drawings with space-planning solutions, water supply and sewerage, heating and ventilation, electrical work, gas supply, low-voltage systems, description and main characteristics of technological equipment, as well as requirements environmental safety.

The commercial part of the tender documentation includes requirements for: the price and the procedure for its determination; terms and conditions of delivery; terms of payment and payment schedule; source of funding for the contract; a bank guarantee for the performance by a foreign company or a Russian construction organization of work in accordance with the submitted offer if it wins the auction.

At the discretion of the tender committee, the commercial part of the tender documentation may include a requirement regarding certain types of liability insurance of the contractor (foreign firm or individual organization) for failure to fulfill its obligations, based on considerations of economic feasibility.

Title list - a list of the construction object and their characteristics (total estimated cost and cost of work for the planned period, design capacity, construction site, start and completion dates of work).

Goods of the investment complex - fully completed construction and prepared for operation (including production) objects of investment activity.

Improvements (improvements) of real estate objects - qualitative changes in the land, which can manifest itself both in a change in the quality of the land (its fertility), and in the creation of buildings, structures, etc.

Real estate appraisal service - the result of the interaction between the appraiser and the customer, as well as the appraiser's own activities, in accordance with the objectives of the appraisal of the property.

Real estate finance - the use of financial resources for the acquisition and development of real estate. It is customary to distinguish between short-term financing - during the creation of a real estate object and long-term - financing the acquisition of a real estate object or the provision of financial resources for a long period secured by a real estate object.

Housing certificate issuer - a legal entity registered on the territory of the Russian Federation, which has the rights of a customer for the construction of housing, a land plot allocated in accordance with the established procedure for housing construction and project documentation for housing, which is the object of raising funds, as well as a legal entity to which all these rights have been transferred in the prescribed manner .

Escrow - a document signed and sealed, issued on the condition that it will enter into force only after the occurrence of a certain event. For the period between the issuance of the document and its entry into force, it is usually transferred to a third party. When conducting real estate transactions, such a third party is a specialized company providing escrow services. Escrow accounts are also used in the mortgage lending process to deposit funds for tax and insurance purposes.

Ethics of a real estate appraiser - a set of ethical rules and norms of behavior of an appraiser during the procedure for assessing real estate

Legal cadastre - a systematized and up-to-date set of information about the rights to real estate objects, their right holders and the transfer of rights.

Author: Shevchuk D.A.

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