Value Is Usually Determined by:
Comparative market analysis for 1-4 Residential units of similar type properties, in close proximity to the subject property. These properties qualify for residential financing.
Larger Residential Income Properties, Single Use & Multi-Use Retail Commercial, Considered Commercial, and Utilize Commercial Financing, are Valued Based Upon "Cap Rate" or Capitalization Rate.
Many Factors contribute to the determination of value.
Consider items like: Rent, Income from Parking, Laundry, Signage, etc
Other items to Consider Include Vacancy Factor, Operating Expenses, Advertising, Property Maintenance, Leases- how long are they, Insurance, Who pay for Minor & Major Repairs, Common Area Maintenance.
N, NN, NNN-called triple net, Determines Who Pays for What, Landlord or Tenant.
Debt Service-how large of a loan on the property, Amount of Mortgage Payments.
Then consider cash flow before taxes, effects of taxes & depreciation, cash flow after taxes.
This is a very simplified answer, there are formulas to calculate all the items making up income & expenses.
Other type of Properties such as Vacant Land, that may not Produce Income would depend upon their Use, Potential Use, Zoning, etc.
Depending upon the Type of Property you are Considering, You may be able to Find Properties & Cap Rates for your Community right On This Site.
Be sure to Consider Using the Services of Professionals When Possible.
An Appraiser can Provide you with an Actual Value if Necessary.
Jun 10, 2013