Estimated the Value of an Investment Home

There are many ways to estimate the value of a property. You can look up comparable properties to see what the recent prices have sold for or you can look at it from a current index value approach. The current index value approach basis the value on current market rates instead of current market home sales. This is a much safer way for an investor to estimate the value of a property. This formula came about a little over 10 years ago and I use it thoroughly for any investor looking to sell their property. The Current Index Value is based on current income payments from a property minus expenses. For example, a multi-dwelling tri-plex yeilds 550 per unit. Total monthly gross is $1650. Expenses include Taxes and various other small expenses which equal about 5k annually. This brings the total income per month to 1233 Pi. This amount is used as the payment for the value approach. The payment is then amortized over 30 years at a current investor rates. (currently 7.0% APR, 10% N/o/o) PV or Principle Value equals $185,323. This is the highest a tri-plex should be bought for in today market. This same formula can be used to buy 10 unit complexes, 100 unit complexes and so on. Based on the CIVA, an investor will always break even or be at a profit if they are obtaining financing. This is crucial when determining a purchase of an investment property.