First and foremost: appraisals are opinions, and everybody has one. The distinction being that appraisers render a professional opinion. Reports by licensed appraisers are certified as meeting the Uniform Standards of Professional Practice. The value reported must conform to the legal definition and concept of “market value.” Read More
Take a close look at a property’s Net Operating Income and Capitalization Rate before buying.
Most investors are quite familiar with the standard formula in income property valuation: Value = Income/Capitalization Rate. Most income properties are offered with a stated capitalization rate. Sometimes it is based on the owners most recent historical income and expense statement or based on the real estate agent’s pro-forma. There are some important issues to consider: Read More