: Residential Rental Property Valuation in El Paso

Objective:

This assignment is designed to deepen your understanding of valuing residential rental properties, using El Paso as our geographical focus. By engaging in this practical exercise, you will gain hands$-$on experience with the critical tools necessary for estimating the market value of income$-$producing properties, enhancing your grasp of real$-$world property valuation nuances.

Instructions:

$1.$ Property Selection:

$$ Utilize online real estate marketplaces such as Realtor.com, Zillow.com, or Apartments.com to identify a residential income property suitable for investment analysis.

$$ Assume the role of a real estate consultant tasked with advising a client on the investment potential of the selected property.

$$ Where possible, choose the same property you evaluated in the previous market analysis assignment. If another property stands out to you as a better candidate for analysis, feel free to make a different selection.

$2.$ Analysis Methodology:

$$ Follow the valuation framework outlined in the "Income$-$producing Property: Valuation" chapter, ensuring all calculations are annualized for consistency and comparability.

$$ Conduct a thorough valuation of the property's market value, employing both the Sales Comparison Approach and the Income Capitalization Approach. The latter should encompass techniques such as the Gross Income Multiplier Method, Direct Capitalization, and Discounted Cash Flow Analysis.

$$ Discuss the differences in valuation outcomes across the various methods used, providing insights into the reasons behind these discrepancies.

$$ Your calculations may be based on reasonable assumptions regarding cash flow, expenses, and interest rates. Ensure these assumptions are justifiable and in line with the property's anticipated financial performance.