Many of my friends are in Bangalore and I often visit them especially during vacations. Some of them are living at a good place but some are paying much but their rental apartment is not up to the standard based on the rental fee. When I asked them why don’t you move since I believe it is not worth living here after paying this much money, they simply said that the value of this property is huge and so is the maintenance charge so the owner needs to take this much fee. I had never done such calculations before so I asked my father
how to calculate property value from rental income? He said that it is usually 2.5 to 3.5 % of the market value of property. Let me explain it to you more.
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How to calculate commercial property value based on rental income?I asked many more people and most of them had the same reply. However one of my cousins helped me to know how to calculate property value based on rental income by giving me a formula for it that is
Called Gross Rent Multiplier or GRM.
GRM= Property Price / Gross Rental Income.
How to determine property value based on rental income?I got different answers from different people so I had to understand each of them. Here are some factors that can help you to get your answer on how to value commercial property based on rental income:
Sales comparison
Income approach
Cost approach
Gross rent multiplier capital
Asset pricing model
I also think that if I get an idea of the value of the properties of the neighbouring houses, then also I would be able to know the property value of a certain property easily.
These strategies have helped me to know how to calculate property value from rental income and I hope will help you all too.
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Authors Of The Question
How To Calculate Property Value From Rental Income?
Pritam Singh
1288Views
2 Year
2022-06-23T09:35:34+00:00 2023-08-16T16:31:44+00:00Comment
1 Answers
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