ABSTRACT
This chapter introduces the serious business of valuing freehold investments. In looking at the time value of money in Chapter 13 we introduced the formula for converting income flows into capital now. This is referred to as the Present Value of £1 pa, or PVpa for short. This formula, which is used for the capitalisation of property incomes or rents, is more usually called the Years Purchase or YP because the multiplier is the number of years of income it would take to purchase the investment at its current value.
