by kramoltz@hotmail.com | Sep 12, 2020 | Real Estate Facts & Figures
Reconciliation. What type of valuation method is most appropriate for a commercial property is usually dependent on its use. Thus, all 3 approaches are utilized, but one is will be given the most weight. For example, in commercial contexts most appraisers will rely on...
by kramoltz@hotmail.com | Aug 18, 2020 | Real Estate Facts & Figures
The Income Approach. This method analyzes a property’s income producing capability and then capitalizes the future income to indicate present value. If there are leases on the property, actual rents will be scrutinized. Comparable property rentals will also be...
by kramoltz@hotmail.com | May 14, 2019 | Real Estate Facts & Figures
Capitalization. When evaluating the worth of an income property based on the value of the income produced, a capitalization rate is applied to the net income. A “Cap” rate is determined by a study of various economic factors, including the returns on other...
by kramoltz@hotmail.com | Apr 8, 2019 | Real Estate Facts & Figures
Present Value. A fundamental concept in real estate investing is that a dollar today is worth more than a dollar in the future. Therefore a “discount rate” is used to determine the present value of an income stream. In computing the present value of a...
by kramoltz@hotmail.com | Mar 5, 2019 | Real Estate Facts & Figures
The return on investment in income property is tied to two basic economic components: the annual net income it produces, plus the proceeds of refinancing or sale. Therefore the total return on a real property asset is a combination of annual returns and the final...