Comments on: Commercial Income Property Valuation

By: Peter Maclennan

Peter Maclennan — Tue, 04 Nov 2008 16:40:38 +0000

Sam,
You have to be able to compare apples to apples.

One property may generate more revenue because it charges higher rents. However, it may also have higher relative expenses due to taxes, utilities, or maintenance.

A separate property may have lower rental income, but the net operating income (NOI) is greater because expenses are lower as well.

If we remember that NOI is what the investor takes home (in theory), which property would you rather invest in? A property that has higher rents, but less NOI or one with lower rents but a higher NOI?

By: Residual Income Business

Residual Income Business — Tue, 04 Nov 2008 07:18:57 +0000

Thank you for the informative article. I didn’t know that it is very important to base these calculations on the net income of the property and not the gross income. Why is that by the way? I wasn’t really clear on that in this post?

Thanks again,

Sam

By: Singapore Property

Singapore Property — Wed, 17 Sep 2008 05:46:23 +0000

Other investment features that affect valuation are liquidity, presence of secondary market (or the lack of), leverage and risk. Strictly speaking, the capitalization rate formula can also be applied to residential real estate properties to know its worth. The Wiley Finance book on Real Estate Market Valuation and Analysis is a good read if you want to find out more.

By: Singapore Seminars

Singapore Seminars — Thu, 24 Jul 2008 17:34:07 +0000

Finally a site that explains “Commercial Income Property Valuation” clearly. Thanks.

By: Eric

Eric — Wed, 31 Oct 2007 20:15:15 +0000

This is exactly what I expected to find out after reading the title . Thanks for informative article