Answer Question 3 and 5 ONLY please
Group Case Study: As a loan officer in a bank, you received an application for a real estate loan from a borrower to buy an apartment in Dubai. The apartment is an unfurnished one bedroom flat situated in Park Island building (Blakely) in Dubai Marina, Details about the property are presented in the following table: Property to be Comparable Comparable valued (A) Property (8) property (C) Sale date October 2020 October 2020 Selling price/value (AED) 750,000 915,000 Gross annual rent (AED) 75,000 58,000 69,000 Annual Maintenance fees 20 20 20 (AED/square feet) Vacancy rate (%) 5 Area (square feet) 700 726 922 Price (AED/square feet) Gross annual rent (AED/square feet) Proximity to A Same building Same building Parking available 1 1 1 Floor level High High High Age 10 years 10 years 10 years Elevators 2 2 Exterior (Building) Glass Glass Glass View Marina View Community view Community view Construction Average Average Average Landscaping Average Average Average *Note: the marina view is given an extra value of 20% for both the price of the apartment and the rent per square feet. 10 10 2 Page 1 of 2 3. Using the income capitalization approach, find the value of the property (A). 4- The current owner of property (A) bought it new from Emaar in 2010 at 1,000,000 AED. He did an upgrade to the apartment 5 years ago (upgrade cost: 50,000 AED). The property has a yearly depreciation equal 5% of its original price. Using cost approach, find the value of property (A). 5. Which approach the bank is most likely to adopt? Justify your answer. Group Case Study: As a loan officer in a bank, you received an application for a real estate loan from a borrower to buy an apartment in Dubai. The apartment is an unfurnished one bedroom flat situated in Park Island building (Blakely) in Dubai Marina, Details about the property are presented in the following table: Property to be Comparable Comparable valued (A) Property (8) property (C) Sale date October 2020 October 2020 Selling price/value (AED) 750,000 915,000 Gross annual rent (AED) 75,000 58,000 69,000 Annual Maintenance fees 20 20 20 (AED/square feet) Vacancy rate (%) 5 Area (square feet) 700 726 922 Price (AED/square feet) Gross annual rent (AED/square feet) Proximity to A Same building Same building Parking available 1 1 1 Floor level High High High Age 10 years 10 years 10 years Elevators 2 2 Exterior (Building) Glass Glass Glass View Marina View Community view Community view Construction Average Average Average Landscaping Average Average Average *Note: the marina view is given an extra value of 20% for both the price of the apartment and the rent per square feet. 10 10 2 Page 1 of 2 3. Using the income capitalization approach, find the value of the property (A). 4- The current owner of property (A) bought it new from Emaar in 2010 at 1,000,000 AED. He did an upgrade to the apartment 5 years ago (upgrade cost: 50,000 AED). The property has a yearly depreciation equal 5% of its original price. Using cost approach, find the value of property (A). 5. Which approach the bank is most likely to adopt? Justify your
