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LEARN ESTATEMASTER IA / SAMPLE LESSON

Read what zero really means.

Diagnose income excluded from a capitalisation calculation.

Begin the lesson
An input that excludes income.
Current cap. rate0%

Excludes this use’s income
from current capitalisation

Terminal cap. rate0%

Excludes this use’s income
from terminal capitalisation

Read the software’s treatment before interpreting the result.

EstateMaster IA 3.40 documented workflow. Verify the equivalent settings in your version.

01
THE IDEA TO UNDERSTAND

Income exists. Why is it excluded?

You are checking the income assigned to a property use. The cash-flow entry exists, but the current capitalisation result does not include it.

HOW IT WORKS

Yes. In the documented IA 3.40 workflow, a 0% Current Capitalisation Rate excludes that use’s income from the current capitalisation calculation. It is not a neutral placeholder. The Terminal Capitalisation Rate has a separate exclusion effect for the terminal calculation.

The method you will practise

  1. Identify the relevant use in Setup Uses.
  2. Inspect Current Capitalisation Rate for a current-value issue, or Terminal Capitalisation Rate for a terminal-value issue.
  3. Confirm the intended valuation treatment. If inclusion is intended, use a supported assumption approved for the appraisal, then recalculate and check the relevant result.

EstateMaster IA 3.40 documented workflow. Verify the equivalent settings in your version.

02
THINK IT THROUGH

Is a 0% Current Capitalisation Rate just an empty placeholder?

Choose what you expect. The feedback will help you test your starting idea.

03
YOUR TURN

Inspect the rate responsible for each exclusion

Compare the cases below. Notice what changes, then read the explanation of why.

WHY THIS HAPPENS

No capitalisation rate is recommended here. This example explains a software input’s effect, not how to value a property.

04
CHECK WHAT YOU UNDERSTAND

The current rate is zero and the current result excludes the income. What should you do?

Choose your next action
Give me a hint

Identify the relevant use in Setup Uses.

05
TAKE THE SKILL INTO YOUR WORK

Now try it in your software.

Inspect the property use and both capitalisation settings in your version. Record which result each setting affects before changing a model. This exercise does not recommend a valuation rate.

WHAT YOU SHOULD BE ABLE TO EXPLAIN

You know which input to inspect without deleting and re-entering valid rent.

Need help with your own example?

The Companion is where you ask about the task on your screen. Include your software version, what you changed and the result you expected.

Read this module’s Companion example

This sample checks your reasoning here. It cannot inspect or certify your work in another application.