Real Estate Appraisal For Rental Properties
By Steve Gillman
Real estate appraisal for rental properties is different than that for single family homes. When looking at a 24-unit building, it would be difficult to find similar ones nearby that have recently sold. This is why a market analysis using comparable sales isn't normally used.
It's also not very useful to use replacement costs either. How can you figure replacement cost if there's no longer any land for sale nearby with proper zoning? This can be used as a secondary method, though, and it can tell you if maybe you SHOULD be building instead of buying.
Real Estate Appraisal Using Capitalization
Investors buy rental properties for the income they produce, and therefore it is income that is used to...
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