Assessing value of apartment building???

[Lex Dixon]

Im interested in investing in apartment buildings. How do you assess the value of an apartment building? Does the potential rental income have a baring on the value? Can I get a good estimation of values from zillow or the county appraisers site? Thanks in advance for any help you guys can offer.

[Dale Osborn]

Lex Dixon for a quick calculation for apartment value if building is old use .40 or if not too old (under 10 years old) then use .50. Take your gross income from the property and multiply it by the above numbers. This will give you a rough idea of what the Net Operating Income (NOI) should be for the property. Divide the NOI by the interest rate you expect to earn from the building and that is the max price to offer.
Example: If you want a 12% return

NOI/.12 = Max offer price.

Hope this helps you out.