how much is your property is worth?

[Jason Malabute]

If you are wondering how much your property is worth today, you will need to know the net operating income and cap rate.

A local broker will be your best resource for the cap rate. Net operating income equals gross rent minus physical vacancy minus economic vacancy divided by operating expenses. Operating expenses include advertising, utilities, contract services, general admin, legal, insurance, property tax, management fee, repairs, and turnover. Operating expenses do not include capital expenses, mortgage payments, or investor distributions.

You divide the net operating income by the cap rate to calculate the property value.

Last, remember that property taxes will be reassessed anytime a property is sold and should be considered. Financing and interest rates will affect how much buyers can pay for a property. Above is a high level of estimating the value of your property. Ultimately, the buyer's offer price will depend on their expected return on investment and where we are on the market cycle.