You want to value a property with an effective gross income of $53,000 and a NetOperating Income of $27,500. The table below summarizes the valuation andincome of comparable properties.Comp 1Comp 2Comp 3Price$300,000$350,000$375,000Gross Income$50,000$55,000$60,000% Operating50%55%$54%ExpenseNet OperatingIncome$25,000$30,000$32,500What value would a Gross Income Multiple approach yield (rounded to thenearest $100)?$329,200$325,000$330,000$316,900

To calculate the value using the Gross Income Multiple approach, we need to find the average Gross…

Answered: You want to value a property with an…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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you have asked to estimate the value of the subject property that has gross rental income of $130,000 and a NOI of $58,000. A summary of transaction data on three comparable market is in the table below. Sp : 650,000 750,000 450,000 Gross rental income: 100 000 150,000 75,000 NOI. : 50 000 56,000 36,000 Based on two methods that are frequently used in the Income approach your task is to estimate the value of subject property. Which method give the highest value? (Ch 10) the subject property has a rentable area of 1,500 Sqm, construction costs amount to $30/sqm. Estimated economic life of building is 50 years. Economic depreciation in terms on negative changes in the neighborhood is estimated to $1000 and based on the sales comparison approach the estimated value of the land amounts to 10,000. Current age of the building is 10 years. Based on the cost Approach your task is to estimate the value of the subject proper
Calculate the NOI of a property based upon the information provided below: Building area: Average base rents: .NNN recoveries: Vacancy rate: Operating expenses . . • Percentage rent . Concessions . Annual debt service 165,720 O 315,720 O 375.720 440,220 O 478.500 O None of these 15,000 sqft $27.50 psf $4.00 psf 5.0% $4.30 psf $6,000 per year 3.0% $210,000 per year
Calculate the assessed value (in $) and the property tax due (in $) on the property. Fair MarketValue AssessmentRate AssessedValue PropertyTax Rate PropertyTax Due $155,000 100 $ $1.20 per $100 $
10. Calculate the assessed value (in $) and the property tax due (in $) on the property. (Round your answers to the nearest cent.) Fair MarketValue AssessmentRate AssessedValue PropertyTax Rate PropertyTax Due $342,900 72 $ 5.1% $
Give typing answer with explanation and conclusion Calculate the assessed value for a piece of property worth $1,472,000.00 at an assessment rate of 55%. Round answer to the nearest cent.
The following information related to a real estate asset investment that is fully financed using REITS equityProject costs:Land. Ksh 300000Buildings. Ksh 2500000Total costs. Ksh 2800000Operating data:Initial rent Ksh 522100Growth in rent. 8% per yearVacancy rate. 6% of gross rentOther income. 1% of gross rentOperating expenses. 16% of gross rent for one yearGrowth in expenses. 7% per yearGrowth in resale price. 6%Selling expenses. 5% of resale priceDepreciation (straight line 27.5 years, mid-month convention Put at service at beginning of the year)Holding period. 5 yearsMarginal tax rate. 30%Capital gains tax rate. 15%Depreciation recovery tax rate. 25%Estimated sale price. Ksh 3747032Selling expenses. Ksh 187352 Required:a). Operating cash flows for the first 5 yearsb). After tax cash flows from the sale of propertyc). Net present value assuming cost of capital of 15%d). What are the factors that will be considered before investing in the asset
Consider the following information about apartment complex: Gross rental receipts $970,000 Other income $130,000 Average vacancy rate 7% Operating expenses $525,000 Capitalization, or discount, rate 5% Calculate the value of the complex using the net operating income approach. $9,700,000 $8,690,000 $10,100,000 $9,960,000
Using the Cost Approach to property appraisal, determine the final appraised value of a building and the land the bulding is on based upon the following: - Land Value-$6 million; > Building Cost (psf) - $250; > Total area (psf)-$100,000: > Developer's profit - S800,000; > Economic obsolescence - S1.5 million; > Functional obsolescence - $3 million; > Locational obsolescence - $2 million; > Curable depreciation - Si million; > Effective age -20 years: > Economic Age- 50 years. Oa $10.340,000 Ob.S14,380,000 OC S13,980.000 Od. 510,380,000 Oe. $8,380,000
23) Data collected about the comparable sales and the subject for the appraisal assignment is presented in the following table. What is the indicated value of the subject property? Gross Rent Rental A B C D Subject $10,000.00 $10,000.00 $23,400.00 $22,050.00 A) $198,000 B) $221,500 C) $201,500 D) $191,500 Cultivated Acres 200 150 250 130 160 Pasture Acres 0 100 100 250 100 Buildings no no house house / barns house / barns Sale Price $100,000.00 $100,000.00 $230,400.00 $220,500.00
Grover Inc. wishes to use the revaluation model for this property: Building Gross Value Building Accumulated Depreciation Net carrying value The fair value for the property is $100,000. What amount would be booked to the "accumulated depreciation" account if Grover chooses to use the proportional method to record the revaluation? OA. $20,000 credit B. $10,000 credit O C. SO Before Revaluation $120,000 40,000 80,000 D. $10,000 debit
d) $275,000 118. What is the market value (V) of a property that has an NOI of $56,000 and a land value (V) of $150,000? The R, is 7%, and the R, is 99%. Round your answer to the nearest $50,000. a) $650,000 b) $700,000 c) $750,000 d) $800,000
You are given the following data for a project that is to be evaluated using the APV method. Year EBIT CAPEX 0 O $201.765 O $193,822 O $185,617 O $222,872 O $213,918 1 $127.000 $60,000 2 Depreciation Increase in NWC Year-end net debt $80,000 Cost of net debt = 8% Unlevered cost of capital = 11.8% Corporate tax rate = 30% Calculate the total value of the project at t = 0. using the APV method. $72,000 $50,000 $100,000 $133,000 $40,000 $80,000 $60,000 $140,000 3 $138.500 $10,000 $84,000 $30,000 $140,000

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