List Categories | List All Articles | List Articles By Title
Real Estate Appraisal - Rental Properties
Real estate appraisal for rental properties isn't the same as for single family homes. If you were looking at a 24-unit building, it would be difficult to find similar ones nearby that have recently sold. Therefore, a market analysis using comparable sales isn't normally used.
It is also not ideal to use replacement costs either. How do you figure replacement cost if there is no land for sale nearby with proper zoning? This is used as a secondary method, though, and can tell you if maybe you should be building instead of buying.
Real Estate Appraisal Using Capitalization
Investors buy rental properties for the income. Therefore it is the income that is used to determine value. The rate of return expected by investors in a given area gives you the capitalization rate, and this is what you use to accurately appraise an income property.
Start with the gross income. Subtract all expenses, but not including loan payments. If a building's gross income is $82,000 per year, and the expenses $30,000, you have a net before debt-service of $52,000. Now apply the capitalization rate to this figure.
If the common capitalization rate is .10, for example (ask a real estate agent), divide the income of $52,000 by .10, and you get $520,000. This is the value of the building. If the usual rate is .08, meaning investors in the area expect an 8% return, the value would be $650,000.
Easy Real Estate Appraisal?
Net income before debt-service, divided by the "cap rate:" It really is a simple formula. The tough part getting accurate income figures. Is the seller showing you ALL the normal expenses, and not exagerating income? If he stopped repairs for a year, and is showing "projected" rents, the income figure could be $15,000 too high. This would mean the building is worth $187,000 less (.08 cap rate) than your appraisal shows.
Another thing smart investors do when buying, is to separate out income from vending machines and laundry machines. If these provide $6,000 of the income, that would add $75,000 to the appraised value (.08 cap rate). Do the appraisal without this income included, then add back the replacement cost of the machines (probably much less than $75,000).
Be careful when using any real estate appraisal method. No formula is perfect, and all are only as good as the figures you plug into them. Used wisely, though, real estate appraisal using capitalization rates is one of the most accurate methods.
Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com
Home Appraisal Values Are Critical
To most, owning a home is a necessity, but sometimes it is a matter of pride or a business investment. Home appraisal values become relevant if one wishes to sell his house.
Investing in Real Estate Vehicle for Wealth Building
Real estate is one of the best vehicles of building wealth. Historically real estate has outperformed other asset classes like stocks or bonds, and is reasonably predictable and less volatile.
Finding The Perfect Maui Home For Sale
If you are thinking of relocating to Maui, this article will hopefully guide you to making a positive decision when thinking of buying a home there. Hopefully, by the end you will be one step closer to finding a Maui home for sale, and being able to purchase it.
Should You Sell Your Home Yourself?
Are you thinking about selling your home? Would you like to sell it by yourself instead of hiring a real estate agent? If so it would be beneficial to review the pros and cons of selling your home by yourself before hanging out the sign.PROSSelling your home without an agent means More Money.
Using Transformation Psychology to Sell Investment Properties
Satisfying and lucrative real estate investment depends upon your correct assessment of profit potential, of course, but your ultimate success depends on your ability to transform a doghouse into a dollhouse. The renovation process involves physical work and choosing the best supplies, in order to create maximum positive emotional effect and profits.
Secrets of Making Money from Real Estate - Part 4
Analyzing and finding the right property deals:Firstly read my other article on how to Buy the property at a discount, this will cover the basics on how to buy property at a lower than market value price. This is very important because It can completely change the aspects and financing the deal.
Real Estate Investment Requires A Team
I had a hard time at first with real estate investment. One of the reasons was that I tended to be a "lone wolf," trying to do too much myself.
Dont Get Stuck Having To Deal With The Sellers Household Hazardous Wastes - After You Move In!
I have a confession to make!I was just outside with Frankie (my dog) and noticed I still had an old car battery sitting by the foundation, at the rear of my house.Yes, I'll admit it's not right, and quite environmentally insensitive for me to have it there.
Finding, Fixing, Financing, and Flipping - The Short Course
Most people get involved in Real Estate investing to make money.Pretty self-evident - or, is it?What would you say if I told you that everything you have been taught about Real Estate investing and making money "rehabbing" your real estate investments is wrong?Well, at least, much of it!Let's take a look at something that all too many people don't think about in their real estate investing - something that seems to be a secret formula to bringing in the most cash from your real estate investments.
Are You Really A Twenty First Century Investor
Today's residential real estate market for investors has become very competitive in most major markets. The vast majority of real estate investing seminars and clubs are encouraging you to search out desperate home owners or distressed properties to be rehabbed.
High Tension for the Buyer and Seller of Real Estate Can Be Reduced
Tensions can run high in both the selling and buying of real estate. After all, there is a lot of money and emotion involved! There are also time pressures and numerous privacy issues to deal with.
Customer Service - The Real Estate Revolution
Traditionally, real estate has been viewed as a sales industry. But perceptions are changing.
A Real Estate Primer
There are a great many books and web sites devoted to real estate investing out there, but most of them concentrate on one specific area of investing. It's often hard to find a general description of real estate investing, one that lists the various real estate investing strategies and how to get started.
Real Estate Tax Incentives
Lower Your TaxesTax incentives for real estate investors can often make the difference in your tax rates. Deductions for rental property can often be used to offset wage income.
Practical Advice for Finding Irish Castles for Sale
Have you ever wondered what it would be like to live in a castle?Have you ever dreamed of dancing in a grand ballroom that at one time was filled with princes and other nobility?If you find yourself dreaming of this lifestyle, you're not alone. Celtic castles, and all things medieval for that matter, have gotten very popular in recent years.
Internet Battleground for Future of Residential Real Estate
Real estate agents are gearing up to face the biggest shift in their industry since it's beginning. No longer the first in the path of homebuyers and sellers, agents have gone from top feeders to the bottom feeders with real estate consumers in just a few years.
What to Look Out For When Buying Off Plan
Buying Off PlanIt can be difficult to decide when every deal seems to be not to be missed!There are some key things I look for when buying off plan, whether it's in the UK or abroad it makes no difference.The property must be good value now ie it compares favourably with similar properties today, and is not based on properties going up in value 10% each of next 2-3 years.
Real Estate Investing Skill Acquisition
Real estate investing is not in any list of high school electives. You can't get an accredited degree in real estate investing.
How to Get Financing after Filing Bankruptcy
If you're thinking about buying a home but have declared bankruptcy in the past, don't give up hope. There are still ways for you to be able to find a loan, even if your credit history is less than sterling.
7 Marketing Methods for Real Estate Coaches
You shower, shampoo, dress your best, check to see if you have plenty of business cards, drive about an hour, introduce yourself by saying "Hi, I'm Mary and I'm a coach" and the other person says, "Hi, I'm Jack and I'm a coach, too!". You meet more coaches than you knew existed.
home | site map
All articles are copyright to their owners.
Note: this website lists articles, We do not Write Articles !