How do you work out the value of a property if it has a negative return of 8% and had similar for the previous 3 years?
Employ a valuer.
See what properties similar have sold for.
Put it on the market and see what the offers are.
There’s three ideas.
Cheers,
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by buxton:How do you work out the value of a property if it has a negative return of 8% and had similar for the previous 3 years?
What do you mean by negative return?
If you mean cash flow negative, then cash flow is not the way valuers or the majority of buyers (who are owner occupiers) value property.
Remember 70% of properties are bought by owner occupiers and they are not looking for return.
If you mean that the property value is decreasing, I would be interested to hear where your property is located. I don’t know of an area where property prices have dropped 4 years in a row.
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
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FREE subscription http://www.metropole.com.auLike Simon suggested, put it on the market somehow. The only way of finding out what something is worth is when someone is prepared to buy it (ie the market)
Cheers,
Gatsby.“Sometimes the hardest thing to do in life is often the best thing to do.”
buxton
the normal way to use a cap rate and known net rental income stream to determine a properties value is thus:
Net Rent / cap rate % = value
for instance…net rent = $12000, cap rate = -8%
therefore…
$12000 / -8% = -$150 000
so in fact, you would have to give me your property plus $150 000 cash.
not looking too flash i expect, alternatively, the above posts make (more) sense.
cheers
brahms
Purveyor of Fine Finances
aka Mortgage Broker Brisbane
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