Question
The following property information is provided. Net operating income (NOI) Debt service (DS) Mortgage Amount Loan-to-value ratio (M) $95,000 $65,000 $610,000 0.75 Calculate the indicated
The following property information is provided.
Net operating income (NOI) Debt service (DS) Mortgage Amount Loan-to-value ratio (M)
$95,000
$65,000 $610,000 0.75
-
Calculate the indicated debt coverage ratio.
-
Calculate the mortgage constant, or mortgage capitalization rate (Rm).
-
Using the debt coverage ratio and the other information provided, calculate
the overall rate (RO) for this property.
-
The property you are attempting to appraise using the income approach has
a NOI of $135,000. Can you use the above information (a through c) to
estimate the value of this property? If so, what is it?
-
What role does the loan-to-value ratio play in this valuation approach?
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Modern Advanced Accounting In Canada
Authors: Hilton Murray, Herauf Darrell
7th Edition
1259066487, 978-1259066481
