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Terminology

Terminology of various Indices

Comparative Index – This is a general term to describe the comparison of two products or services in totality for easy understanding of their respective positions to each other. It also means the aggregated scoring of one item is compared to the other item or school of items.

Inter-Property Index (IPI) – This means two or more properties are compared to each other in their aggregated scoring for a basket of elements. Usually, the index is build upon selling price or rental price divided by the scoring of their benefits. A higher figure would mean higher price (or cost ) per benefit than a lower figure. A property with IPI-S of 100 is more costly than say another similar property with IPI-S of 90. In other words, IPI-S of 100 means it costs 100 per unit of benefit, and is more expensive than IPI-S of 90 – which means it costs 90 per unit of benefit.

IPI-S – This is the Inter-Property Index of properties for Sale. It means two or more properties are scored according to their price for Sale over benefits intrinsic to their build, size and facilities which come attached with them.

IPI-R – This is the Inter-Property Index of properties for Rent. It means two or more properties are scored according to their price for rental over benefits intrinsic to their build, size and facilities which come attached with them. IPI-R is amplified 100 times because rental price (in 1,000’s) is much lesser than the selling price (in 100,000’s).

IPI-E – This is the Inter-Property Index of properties with respect to external factors. It means two or more properties are scored according to their price (rental or selling price) over benefits extrinsic to them – such as environment, amenities and services surrounding it.

Therefore, a property for sale would have two IPI Indices – IPI-S and IPI-E. They have two purposes:

  • IPI-S – gives the impression of the Price per benefit of the build, size and facilities intrinsic to its identity.
  • IPI-E – gives the impression of the Price per benefit of the environment, the surrounding amenities and services.

Hence, a property which has both lower IPI-S (or IPI-R) and IPI-E means it is a better investment than one which is higher. It basically provide an indication that the build of the property is good preference and the surrounding is advantageous.

Simply, a good candidate for employment must have good knowledge (qualification), attitude, character and physical health. Similarly, a good property should have a common characteristic of good space, well maintained facilities, surrounding amenities, transportation and security.

Read about WHY this approach? here.

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