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What is imputed rent and its formula?
The value of consumption services obtained by owning one's house rather than having to pay rent
- Expected Return = D + G – C,
- D = imputed rental dividend,
- G = inflation-adjusted growth in home value, and
- C = costs (insurance, property taxes, and maintenance)
What are qualitative reasons that affect buy vs. rent
- 1) how long you are staying in a location
- 3) Ask someone, please
What are the types of leases
Flat Rent, Step-Up Rent, Indexed Rent, and Rents dependent on performance,
What is effective rent and how to calculate it.
- A single measure that can be used in comparing leasing alternatives.
- To calc this you must calc the pv of the expected net rental stream. Then calc a equivelant level of annuity equal to the calc rent.
Valuation of Income Producing Properties
GIM(Gross Income Mult.) = sales price/gross income
- Cap Rate = NOI/ price
- *Cap Rate does only insures that you are paying a competitive price for the home.
How to calculate the load factor of a building?
Ex. There are 4 tenants and 20,000 sqft of space. There are 4,500 sqft/tenant, which leaves 2,000 sqft for common space. The load factor would be 20,000/18,000=1.111
What is DCR?
DCR is Debt Coverage Ratio. It is attained by dividing your NOI(usually 1st year)/The mortgage.