So, I'll take as an example an apartment that currently rents at $100,000 per year and the method I'm using so far.
(The figures are completely unreal and serve as just an example)
To determin the net rental income:
- Take the average annual rent for that building ($100,000)
- Substract 10% as an unoccupancy risk factor ($90,000)
- Substract 7% for various appartment management , remodellings and expenses over the year(s) ($83,700)
- Substract all service charges you might be paying annualy as a landlord to the building management (for example $20,000)
Would leave you with a net annual rent of $63,700
Then, for example say you want to figure out the real value of the flat with an ammortization timeframe of 15 years.
$63,700 * 15 = $955,500
If in a good area, with access to public transport, restaurants, schools and so an add a 20% premium on top.
Which would result in an actual value for the property $1,146,600
$955,500 * 1.20 = $1,146,600
Is this an accurate way to measure single unit valuation?
(Amateur here so would like to hear all opinions)
Submitted May 11, 2019 at 05:06AM by VividConcentrate http://bit.ly/2DZ19mg
