Top 5 Real Estate Calculations
Despite what many of us would prefer, real estate does involve some math. Luckily, most of the formula’s are rather simple. So here we go with the top five real estate calculations (according to me, that is):
1. Cap Rate:
Net Operating Income/Total Price of Property
This is mostly used for valuing apartment complexes and other commercial buildings. You want to have a cap rate that is at least as good, preferably better, than comparable buildings in the area. I almost always want to be at a 10 cap rate or better. And always be sure to use real numbers...
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