Buy/Sell Real Estate
Property buyers and sellers must realize that the numbers must make sense.
Whether you are considering buying or selling property it is important to establish a relationship with a commercial real estate agent who is very familiar with the market that you are searching.
Estimating the value of a property is fundamental to the decision making process. Unlike residential property, where opinions and emotions are involved, commercial property is all about the numbers. The value of a commercial property is based on three primary elements: income, expenses (cash-flow) and rate of return, which is commonly called capitalization rate. I will provide property buyers and sellers with an investment property analysis that will digest these three elements and will help you determine a fair market value of the property. Income in a building is derived from rent. How much rent tenants pay will affect the value of the building. Knowing the fair market value of rent in a specific building and location is also very important in determining if the building is undervalued or overvalued. Location, parking, type of construction, building condition, etc. are important factors that will also influence the value of a property. Property buyers who are going to operate their business in the building will have specific needs that become important elements to consider. Location and demographics are typically the most critical criterion. This information will be provided to property buyers and sellers to make educated decisions.
Investment Property Analysis will include some of these elements:
- Cap Rate
- Return on Investment
- Cash on Cash Return
- Taxable Income
- Cash Flow before Taxes
Similar properties on the market in a specific location and price range will be evaluated for a basis of comparison.