How to Value Property

There are many ways to value your real property—

1. by completing a CMA, comparative market analysis, yourself or asking a realtor to do one for you, comparing what other similar properties have recently sold for in the same general area
2. by using a cost approach—depreciating the cost to reconstruct an identical structure so that it is comparable to your existing building
3. by using an income approach—dividing NOI (net operating income) by the cap rate for this type of property in that location
4. by spreadsheet analysis using IRR, Internal Rate of Return and comparing it to IRRs for other investment opportunities
5. by obtaining an appraisal from an accredited appraiser
6. by what a willing buyer and willing seller agree to, both being knowledgeable and having adequate access to reasonably complete information
7. by looking at assessed value or by dividing realty taxes by the applicable mill rate
8. by experience.

@ profbruce