This method is used for income properties:
Using Capitalization Rate (cap rate) to estimate value:
Using Gross Rent Multiplier for value estimate:
Then Condition and Future Expenses Must be Considered:
Know the Income Method, as It's Used a Lot:
Working with investors can be quite rewarding, as this niche real estate market is quite active. You will also build great repeat business as well as referrals from satisfied investor clients. **Update: I'm updating this article after the real estate market crash and during what appears to be the beginning of a recovery. Appraisers became extremely conservative after the market problems and have been blamed for slowing the recovery by under-valuing properties and using foreclosures for comparables. However, they seem to be getting back on an even keel now.