The appraisal of over‐rented property

Develops and compares a number of alternative discounted cash flow (DCF) approaches to the appraisal of over‐rented property. The transparent nature of DCF techniques makes them more suitable than traditional techniques for the appraisal of over‐rented property, but the different DCF approaches reveal the essential risk characteristics of over‐rented property, including option characteristics similar to those of convertible bonds. This suggests that even more complex appraisal techniques used in other investment markets may be more appropriate.