Case Study Of Using The Residual Method Based On Monte Carlo Method To Improve To Evaluate Land Value

Nowadays, the corruption in management of Chinese land and resources occurs repeatedly, the worst part of which is loss of land assets and land evaluation price, an economic leverage, plays an important role in preventing this kind of situation from continuing deterioration. As for the land which has the potential of development, the residual method is an very effective method. However, in the aspect of land appraisal, on the one hand, with the changes of economic situation, the fluctuation range of the real estate price becomes larger; on the other hand, because the number of the market case investigations is deficient, assessors are too subjective, and some important economic parameters that have a great influence on the results have a great deal of uncertainty, which is ignored by the traditional residual method. Choosing important economic parameters by mistake may lead to the results of evaluation deviating from the real value. Considering the uncertainty of the economic parameters, this paper uses a random distribution with certain regularity instead of a single value and uses Monte Carlo method to improve the residual method, with the aid of Excel and Risk Simulator for Monte Carlo simulation, making the results of evaluation more near to the actual situation of the land market and the subject matter. By comparing the transfer price of the later nearby similar plots, it seems that using the residual method improved by Monte Carlo method to evaluate land value is effective way. If this method can be successfully applied to Land valuation, it can not only make up for the deficiency of the existing traditional land evaluation methods and greatly improve the precision of evaluation, but also promote the informationalized construction of real estate evaluation in our country, which has certain practical significance. The paper provides the traditional land evaluation with new ideas and methods, and can be a reference to other evaluation methods of subject matter.