Analyzing a Real Estate Investment Atlanta GA

The following article offers eight methods for analyzing a real estate investment. The information included discusses taking different properties and costs into consideration.

Local Companies

SON Capital LLC
(800) 710-2645
1230 Peachtree Street NE
Atlanta, GA
Resurgens Risk Management
(404) 873-1561
1201 Peachtree St NE
Atlanta, GA
ExcelCore, LLC
404.347.9254
640 Glen Iris Drive, NE #515
Atlanta, GA
Time Finance
(404) 577-3650
41 Marietta St NW
Atlanta, GA
1st Infinity Tax Services
(404) 880-4667
235 Peachtree St
Atlanta, GA
Rhonda Harris Enterprises
404-591-5133
PO Box 941661
Atlanta, GA
Academy Financial Service
(404) 897-9968
1531 Piedmont Ave Ne
Atlanta, GA
Debt Management Guys LLC
(404) 949-7963
2625 Piedmont Road Suite 56109
Atlanta, GA
The Traders Guide
800 918 4690
2870 Peachtree Rd
Atlanta, GA
TAC Management
1 (800) 615-5389
1258 DEKALB AVE NE 120
ATLANTA, GA

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Choosing the correct approach to analyzing a real estate investment is as important as choosing the particular property or strategy. Selecting the wrong approach for a particular market or type of property could cause investors to forsake profits. Here is a summary of some different approaches used to assess value and returns.

Sale comparison approach: Compares the subject property to similar properties recently sold and calculates an average price per unit or square foot to determine value.

Gross rent multiplier: A rough estimate of value: take the sale price and divide by monthly potential gross rental income. Generally used by investors who repeatedly buy the same types of property. This method determines the value of a property based solely on potential rental income for the first year.

Limitations: It reflects a one-year snapshot in time. It only works when comparing properties that have similar operating expenses and similar occupancy/vacancy rates.

Direct capitalization (cap rate): Take the net operating income (NOI) and divide by sales price. It is expressed as a percentage of the sales price offered, or a percentage of the price an investor is willing to pay. It accounts for operating expenses, gross rents, non-rental income, vacancy and credit losses.

Limitations: It is a one-year snapshot. It does not account for the present versus the future value of the dollar (known as the time value of money, or TVM). It also does account for owner financing, tax implications, property depreciation and appreciation.

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NuWire Investor is an online publication that offers quality information about alternative investments such as real estate, commodities and franchises.

Author: Patricia Rattray
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Featured Local Company

SON Capital LLC

(800) 710-2645
1230 Peachtree Street NE
Atlanta, GA

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