John Williams wants to purchase an apartment complex. The complex consists of 75 units each renting for $700 per month. The estimated vacancy and collection loss rate is 7%. The insurance for the building is $40,000 annually and taxes are $22,000 annually. Utilities are $18,000 and the maintenance expense is $29,000.
Assume a market cap rate of 11%. Recent sales of nearby apartment complexes have resulted in the following information.
| Characteristics |
Units |
Slope Coefficient in $ per Unit |
| Proximity to downtown |
Miles |
-350,000 |
Proximity to
public transportation |
Blocks |
-500 |
| Building size |
Units |
+75,000 |
Williams' proposed apartment complex is 4 miles away from downtown and 6 blocks away from the nearest public transportation.
What is the net operating income (NOI) for Williams' proposed apartment complex?
NOI = (75)(700)(12)(0.93) – $40,000 ? $22,000 ? $18,000 ? $29,000 = $476,900.
Using the sales comparison approach, the value of the apartment complex is:
Value = (-350,000)(4) + (-500)(6) + (75,000)(75) = 4,222,000
Using the income approach, the value of Williams' apartment complex is:
Appraisal price = NOI / market cap rate = $476,900 / 0.11 = $4,335,454.55 | 
发表于 2011-3-31 13:31
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