You might not have thought that the price of a property would be different from the value of that property. You also might not have thought that the same income property has a different value, and price, for different people.
So, how do you know what price YOU should pay for an income property.
There must be some sort of guidelines to help you navigate through this ‘swamp’.
Let’s start with the “price”:
A Seller wants to sell his income property and move on to another. So, he advertises the property for $1,000,000. You figure that he didn’t put the property up for sale at his ‘rock-bottom’ price. I mean, who does that? Everybody leaves a little ‘wiggle room’. So, you haggle awhile and the Seller agrees to let you ‘steal’ it for $940,000.
Some time later, everything seems to be going along okay, and you get an email advertising a software program that purports to help you determine (as in calculate) the value of an income producing property. ??? This doesn’t particularly concern you because you beat your Seller out of $60,000, and “that ain’t hay”!
Or, is it?
OK, let’s get to it. Did you just accept the Seller’s price as ‘probably’ ok, and then offered something lower for the heck of it? With a lot of luck, you might have done well.
If, on the other hand, you thought about alternative returns on your money, as, for instance, from stocks, savings accounts, bonds, or from a similar income property, you are heading in the right direction. There is only so much money, so let’s make every dollar count.
Figure out how to earn the highest return. Now you are on the road to determining “”Value” to you. That is the mathematical part. But remember that old saying about real estate: Location, location, location! What about “efficiency” (economy of scale)? How about one roof over a single family rental or one roof over four units (4-plex)? “Numbers” will not replace, just enhance, judgment. Judgment will lead you to choose one property over another, but no matter what property is chosen, the “numbers” always come into play.
That is where APOD PLUS comes to your assistance. You make yourself familiar with alternative rates of return and then, with APOD PLUS doing all the work, determine the rate of return on various properties. Whereas you might be able to find the return from stocks, bonds and savings accounts in the newspaper, the return from real estate must be calculated. Each property is unique. Is it worth the effort? Well, I’ll bet you have heard all the stories that I have heard citing real estate as one of the very best investments
The good news is you do not have to learn how to calculate the Internal Rate of Return, the Cap Rate, Net Present Values, etc. You simply enter the income, expenses and a small amount of information into the program…and, stand back! You will get a huge amount of information about a property you are interested in.
With very little effort on your part (and no math or exotic computer expertise) you will get all of the rates of return and measures of value you will need to make the best selection for your investment. AND, IT IS AUTOMATICALLY CALCULATED for you. Just take the one that will make you the most money!