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Real estate appraisal, property valuation or land valuation is the process of assessing the value of real ... [citation needed] ... The reports rates conditions from ...
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 ...
Equity build up rate – Increase in equity in year 1 from mortgage principal payments divided by cash invested in the property. Capitalization rate – Net operating income (NOI) divided by property's asset value. [1] Gross rent multiplier – The ratio between a rental property's gross scheduled income and its market value.
For income-producing real estate, the NOI is the net income of the real estate (but not the business interest) plus any interest expense and non-cash items (e.g. -- depreciation) minus a reserve for replacement. The CAP rate may be determined in one of several ways, including market extraction, band-of-investments, or a built-up method.
Real estate benchmarking is the standard of measurement used to analyze the financial characteristics of a real estate investment property. In the general sense, real estate benchmarking refers to the comparison of potential real estate investment properties against a predetermined framework of measurement. In a narrow sense, the term real ...
Rental value is the fair market value of property while rented out in a lease. More generally, it may be the consideration paid under the lease for the right to occupy, or the royalties or return received by a lessor ( landlord ) under a license to real property . [ 1 ]
A similar method is known as split-rate taxation. Current-use valuation - This method assesses the value of a given property based only upon its current use. Much like land value taxation, this reduces the effect of city encroachment. Conservation easements - The property owner adds a restriction to the property prohibiting future development ...
With residential real estate, the perceived safety of a neighbourhood and the number of services or amenities nearby can increase the value of a property. For this reason, the economic and social situation in an area is often a major factor in determining the value of its real estate. [5]