Formula Rental Income Vs. Asking Price?
is there a formula for determing whether or not an askiing price is good or is the question whether the income vs expense makes sense on the property. If anyone can understand what I am trying to ask, I would appreciate input. I am new at this if you couldnt already tell .
There is the IRV formula. It is INCOME/CAP RATE = VALUE.
To make things REAL easy, why note use Proforminator program, which is available to you on this website. Just click "Tools" at the bottom of this page, then click "Proforminator". There are some other great calculators there, too
If I may, I am going to quote one of my Real Estate mentors whom I admire very much! I think this is how he would respond to this post once he saw it =)
<<Any building anywhere any time is worth 10 times its Net operating income; 9 times is a good deal; 8 times is a very good deal; At 7 times, come get me!!!>>
This might help you out.
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=467
Cap = NOI/Price
There are many ways to compare properties. Find one that works for you and go with it.