Value of Land
Enter a whole dollar amount (no cents) for the value of the land of the Property. The Value of the Land is not depreciable and is used to determine the depreciable amount. The depreciable amount is the Purchase Price minus the Value of Land.
Fair Market Value
Enter a whole dollar amount (no cents) for the Estimated Fair Market Value of the Property. The Estimated Fair Market Value is only used to determine the future value of the Property when the Resale Valuation Method is set to Annual Appreciation.
The Resale Valuation Method determines how the Projected Property Resale Value is calculated.
Enter the percentage you assume the Property will appreciate annually. Annual appreciation varies from one local real estate market to another. The annual appreciation should be a whole percentage and greater than zero.
Capitalization of NOI
Enter the Capitalization Rate which will be used to determine the Projected Property Resale Value. The Projected Property Resale Value is calculated as NOI / Capitalization Rate * .01. For example, 8.5 percent
If Capitalization of NOI is selected as the Resale Valuation Method, then you may flag that the NOI of the subsequent year be used in calculating future property value. For example, if you check 'Sbsqnt Yr' and look at the resale analysis in year 5, the NOI of year 6 is used in this calculation.
NOTE: Using the subsequent year option restricts you to a 19 year projection!
Gross Rent Multiplier
Enter the Gross Rent Multiplier which will be used to determine the Projected Property Resale Value. The Projected Property Resale Value is calculated as Gross Schedule Income * Gross Rent Multiplier.
Enter the estimated Resale Costs as a whole percentage (no decimals). The percentage you enter is multiplied by the Projected Property value to determine the costs involved in re-selling the property. This will affect the Net Proceeds from Resale.
The discount rate is used in calculating the time-value of money. Enter the discount rate used to calculate Present Value and Net Present Value.