Multifamily Property Valuation Calculation

[Davit Gharibyan]

Hi can someone help me with valuing a property. I use actual income. Would you use actual vacancy as well? The deals I am looking at have low vacancy. If I buy the property and increase the rents the vacancy would go up.

My confusion is,

1. Would I calculate based on actual current income and vacancy?

2. Actual potential income and my projected vacancy?

3. There is even a school of thought to use market rents then deduct 10% vacancy, then 50% expenses and that should give you NOI (rule of thumb).

I search over and over on internet and in books, but there is no definite answer.

Any clarifications are appreciated.