I found a property which say it's yearly net income is 32 @ a 10% cap rate the value of this property is 320

this property is 320 is this correct?
In Buying Property - Asked by gunnar o. - Jan 7, 2009
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Answer(s)

Randy W.
Broker/Agent
Owosso, MI

Based on that scenario the sale price should be 320, correct.

Jan 7, 2009
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Andres G.
Owner/Investor
Miami Beach, FL

The math is accurate but research should be done on the market cap rate for the asset type and neighborhood. If every other similar property in the area is priced at a 12% cap rate you are over estimating the value of the property, if every other property in the are is priced at a 7% the you are estimating value too low. Accurate estimates up front can save you a lot of headaches later.

Jan 11, 2009
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