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The aim of this briefing is to look at the often overlooked impact of gearing (or leverage) on risk. The positive impact on equity return in a strong market is gained by increasing the overall risk of the investment and potentially negative impacts on returns in weak markets.

This Education Briefing is an explanation of how the addition of individual assets to a portfolio can, with gearing, impact upon the portfolio risk/return profile.

Through a simple example, this briefing shows how geared portfolios can struggle in poor markets when the servicing of the debt (at increased interest rates) can have a severe negative impact upon returns.

The process of borrowing at a bank rate below the return rate on an investment project can increase the equity return of the project as long as all incomes and interest rate remain at appropriate levels but when incomes fall or disappear and/or interest rates rise, the implication for the assets return and/or solvency can be highly significant.

This is a review of existing models.

Since the global financial economic crisis hit the world markets in 2007/2008, the role of property valuation has been under greater and greater scrutiny. The process of valuation and its quality assurance has been addressed by the higher prominence of the International Valuation Standards Council (IVSC). This is a significant initiative worldwide. However, there has been little written on the appropriate use of valuation approaches and methods in market valuations. There is now a hierarchy of valuation definitions. In order, there are valuation approaches, valuation methods and, as a subset of the methods, techniques or models. The purpose of this paper is to look at the importance of identifying the appropriate approach to be adopted in market valuations and the methods, techniques and models that should be applied to determine market value.

This practice briefing is an overview of the valuation approaches, methods and models available to the valuer and comments on the appropriateness of valuation each in assessing market value.

This paper reviews the IVSC-recognised approaches and prompts the valuer to be careful with the semantics involved so that they are better placed to provide an unambiguous service to their clients.

The role of the valuer in practice is to identify the appropriate approach for the valuation of the subject property, choose the right method and then apply the correct mathematical model for the valuation task in hand.

This provides guidance on how valuations can be presented to the client in accordance with the International Valuation Standards.

The aim of this study is to comment upon the relatively straightforward but often misunderstood role of gearing (or leverage) on the potential equity return of a property investment portfolio.

This education briefing is an explanation of the how the addition of individual assets to a portfolio can, with gearing, impact upon the portfolio return.

Although, this case study is relatively straightforward, it shows how portfolios can be geared to give enhanced returns at differing, aggregate and levels of risk.

The process of borrowing at a bank rate below the return rate on an investment project can increase the equity return of the project as long as all incomes and discount rate remain at appropriate levels.

This is a review of existing models.