Question

F the Net Operating Income of a commercial property is $840,000 and the Capitalization Rate is 8.75% what is the estimated value of the property

If the Gross Rent Multiplier of a single-family dwelling unit is 130 and the Monthly Market Rent is $1,750 what is the estimated value of the property?

If the annual gross income from an apartment project is $40,000 and the gross income multiplier is 6.2 what is the estimated value of the property?

ASAP PLS HELP

Answer 1

Answer: See explanation

Step-by-step explanation:

a. Net Operating Income = $840,000

Capitalization Rate = 8.75%

The estimated value of the property will be:

= Net Operating Income / Capitalization Rate

= $840,000 / 8.75%

= $840,000 / 0.0875

= $9,600,000

b. The estimated value of the property will be:

= Gross rent multiplier × Annual market rent

= 130 × (1750 × 12)

= $2,730,000

c. The estimated value of the property will be:

= Gross income multiplier × Annual gross income

= 6.2 × $40,000

= $248,000