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Vancouver Property: How to Analyze the Value of my home

September 22, 2008

Filed under: Vancouver — Richard Morrison @ 2:47 pm
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vancouver Property – Analyzing the Value of my vancouver Properties

Base your analysis on the actual numbers and future numbers (There is always potential to increase rents in your vancouver Property). Ask for a rent roll of your vancouver Property and operating expenses report from other owners. Then, cross check this information with the actual leases for the units around the area of your vancouver Property. Make comparisons with other vancouver property, insurance rates, city of vancouver property taxes, etc. vancouver property management costs may also be included in your vancouver property comparisons.

  • Cost Per Unit in your vancouver Property – compare the cost of each unit in your vancouver Property or apartment
  • Square Footage – cost of your vancouver property divided by square footage
  • Gross Rent Multipliers – cost of your vancouver property divided by cash flow from rent minus expense from your vancouver property
  • Opportunities For More Value in your vancouver Properties (conversion or additions; parking, laundry services on your vancouver Property)

Major Tip: Use the Internet in doing research to valuate your vancouver property. You can begin by accessing our site or simply by clicking here: [ Selling Your Home in vancouver with our high tech approach ] to speak to one of our team members! We will help educate you on the value of your vancouver Property.

Formulas to Determine the Value of your vancouver Property:

Capitalization Rate = net operating income / purchase price of your vancouver Property.

Net operating income – deduct expenses from income. So if a vancouver Property costs $400,000 and earns a Net income of $30,000, then the equation is: $30,000/$400,000= 7.5% cap rate.

True Property Value = total operating income / capitalization rate.

So we take the net operating income of your vancouver property of $30,000 and divide that by the capitalization rate of 7.5%, the equation is: $30,000/7.5%=$400,000

Gross Rent Multiplier of your vancouver Property – GRM

Your vancouver Property value divided by the gross income = GRM (Gross Rent Multiplier)

So if the total cost of your vancouver property was sold for $600,000 and the gross income is $75,000, the equation is: $600,000/$75,000= GRM of 8.

If your vancouver Property has a GRM of 8 you are in good shape!

Return on Investment (ROI)

It’s good idea to gauge how your vancouver Property is doing once a year. Determine if your vancouver Property is worth keeping or selling or figuring out ways to gain more value from your vancouver property. The return / investment X 100 gives you a rough ROI of your vancouver Property.

Return (rental income from your vancouver property) / Investment x 100 = ROI

Say you bought your vancouver property for 150,000 in cash and earn $8,000 in rent each year, your ROI formula would be:

$8,000 / $150,000 x 100 = 5.3% (That’s your return of your vancouver Property each year).

If you would like more information we can make sense of all of this and properly evaluate your vancouver Property.

Contact us today at 604-767-3703 or fill out Free vancouver Property Valuation Form – click here!

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