The below topics are discussed in much more depth on our members' Financial Analysis page

      T here are many different financial analysis tools available to help determine what price an investor can reasonably pay for a given income property, and what kind of return they are likely to receive on their investment. The more sophisticated the analysis, and the longer the projections into the future, the more assumptions must be made that can make such predictions invalid. The primary factors that will always affect return on investment is the NOI and the amount of leverage you are able to achieve.
      You may wish to become familiar with the various tools used to analyze a property's value as an investment vehicle and its likely financial performance over time. They are:

• Capitalization Rate
• Cash on Cash Rate of Return
• Debt Coverage Ratio
• Fair Market Value
• Gross Rent Multiplier
• Internal Rates of Return and Financial Market Rates of Return
• Market Analysis
• Price Per Unit or Price Per Square Foot
• Price Per Unit
• Payback Rate

The above topics are discussed in much more depth on our members' Financial Analysis page