Run through an example of using the income approach to valuation.
- The income approach is an appraisal technique…that is often called the Gross Rent Multiplier, or the GRM.…Now to calculate the GRM, you need to know…the monthly rents and sales prices…of similar properties that have sold recently.…For this reason, the method only works…for income-producing properties.…Let's take a look at an example here…and see how that differs from the comparable sales approach.…
Okay, welcome back.…Now we're going to look at the income approach.…So it's going to look kind of similar…to the comparable sales because, well,…we need to have comps in order to calculate this as well.…So the difference here is we use the comp information…in a different way.…We calculate what are called GRMs,…the Gross Rent Multipliers, and then use that…to calculate the value.…So up top, we have the same information.…
We have all of this is this exact same information.…But instead of just using the per square foot…based on the sales and making adjustments,…what we're going to be doing is just looking…at the rent that it achieves.…
Note: This course uses data and example properties from the United States, but the concepts taught and tools provided are just as useful for any market.
- Determining if real estate investment is right for you
- Choosing a market and a property
- Using financing
- Strategies for first-time investors
- Real estate market cycles
- Valuing a property
- Analyzing your market
- How leverage impacts investments
- Real estate investment case studies
Skill Level Appropriate for all
Excel: Analyzing and Visualizing Cash Flowswith Curt Frye1h 16m Intermediate
Learning Real Estate Photographywith Scott Hargis3h 21m Beginner
Managing Your Personal Investmentswith Jane Barratt1h 31m Appropriate for all
Start here3m 29s
1. Case Study: Joe's First Investment
2. The Many Ways to Invest in Real Estate
3. Real Estate Market Cycles
4. How to Value a Property
5. Understanding Your Market
6. What Makes a Good Investment?
7. Understanding Leverage
8. Case Study: Rental Income Property Analysis
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