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These three hypothetical development scenarios follow to illustrate the test of maximally productive use of a $100,000 site: Industrial warehouse Cost to construct 10,000 sq ft (930 m 2): $750,000; Market Value of 10,000 sq ft (930 m 2): $910,000; Profit for industrial development: 7%; Retail strip center
Property investment calculator is a term used to define an application that provides fundamental financial analysis underpinning the purchase, ownership, management, rental and/or sale of real estate for profit. Property investment calculators are typically driven by mathematical finance models and converted into source code. Key concepts that ...
Example: $200,000 Sale Price / (750 per month rent * 12 months) = 22.22 Today, it is quite common for GRM to be quoted by real estate professionals using annual rents rather than monthly rents. A 100 GRM (monthly rents) = 8.33 GRM (annual rents). An 8.33 GRM calculated on annual rents suggests the gross rent will pay for the property in 8.33 years.
Capitalization rate (or "cap rate") is a real estate valuation measure used to compare different real estate investments. Although there are many variations, the cap rate is generally calculated as the ratio between the annual rental income produced by a real estate asset to its current market value. Most variations depend on the definition of ...
The local multiplier effect (sometimes called the local premium) is the additional economic benefit accrued to an area from money being spent in the local economy. The concept has been taken up by advocates for "spend local" campaigns in addition to more formal treatments in the area of regional economic development .
Floor area ratio (FAR) is the ratio of a building's total floor area (gross floor area) to the size of the piece of land upon which it is built. It is often used as one of the regulations in city planning along with the building-to-land ratio. [ 1 ]
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A real estate license must be obtained from the DRE in order to engage in the real estate business and to act in the capacity of a real estate broker or salesperson within the State of California. Before applying for a license, all education and experience requirements mandated by the Department must be fulfilled. [ 6 ]