From the course: Rental Properties 101

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Adding depreciation to your deal analyzer document

Adding depreciation to your deal analyzer document

From the course: Rental Properties 101

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Adding depreciation to your deal analyzer document

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- [Instructor] Over here in this box is the number of years that the IRS lets us write off or depreciate our properties. Now, this is the useful life for real estate. And the IRS has 39 years for useful life of commercial or multifamily properties. However, for single family residential properties, the number is 27 and a half years. How they came up with that I don't know but we need to use the right number in order to calculate the correct depreciation. So for single family residential properties, the number in this box is 27.5. With this information in our first year operating projections, we will be able to go up and look at our comparative analysis section and understand now about these indicators that have been automatically calculated for us. Let's go to the gross rent multiplier. GRM provides an estimate of the amount of time it take to pay off the property if you applied all the gross rents to the purchase price.…

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