Appraisal problemestimate the present market value of a 10, Ask an Expert

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Appraisal Problem

Estimate the present market value of a 10 unit apartment house given the following information pertaining to the property. Each apartment has 1,000 square feet of living area, 3 bedrooms and kitchen appliances. Tenants pay their own utilities. The value of the land is $250,000. The estimate replacement value is $195 per square foot for this type of construction.

Total operating expenses, insurance, and property taxes for the year, $12,000

Management fees are 6% of total rents. The building is 20 years old and has an estimated future useful life of 40 more years. First mortgage are available at 6% for 75% of the purchase price. Equity will be used as the other 25% of the purchase price and requires a 10% return.

Compute the Following

Net income before capitalization__________

Capitalization rate adjusted for recapture_________

Estimated value of the property using the income approach $____________

Estimated value of the property using the replacement cost approach $_____________

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91641768

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