Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The formula for applying the income capitalization method is represented below: PropertyValue=CapitalizationRateCashFlowsfromOperations Let's practice using the income capitalization method to determine a valuation for your
The formula for applying the income capitalization method is represented below: PropertyValue=CapitalizationRateCashFlowsfromOperations Let's practice using the income capitalization method to determine a valuation for your building. You ran the numbers and found that in 2013 , the property was generating $4,612,500 in annual income. Using the income capitalization method, what is the estimated value of the property? For your cap rate, use the going-in rate of return from operations, without debt service (unlevered) and without capital or leasing expenditures such as brokerage commissions, you feel you would need to earn on your money if you were to purchase this asset. The formula for applying the income capitalization method is represented below: PropertyValue=CapitalizationRateCashFlowsfromOperations Let's practice using the income capitalization method to determine a valuation for your building. You ran the numbers and found that in 2013 , the property was generating $4,612,500 in annual income. Using the income capitalization method, what is the estimated value of the property? For your cap rate, use the going-in rate of return from operations, without debt service (unlevered) and without capital or leasing expenditures such as brokerage commissions, you feel you would need to earn on your money if you were to purchase this asset
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started