How Do I know The Value Of My Income Property?

Most real estate investors eventually ask me “How do I know the value of my income properties?”

All income – All expenses = Net Operating Income

Net Operating Income  / Cash Invested = Cap Rate

If you are an investment market driven by cap rates that should get you what you need to know.  But if you are a cash investor you may be better suited to value your property based on the formula for Cash on Cash;

Cash Flow Before Taxes / Cash Invested = Return of Cash on Cash

Knowing the different formulations and when to use them is a big part of the work in being a rental property owner.

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