SIMPLER CAN BE WRONG

 

CAPITALIZATION RATE. You can employ Treasurys yield if you are a buyer, but if you are a seller it's better to use a lower yield, since you does not have guarantees of being able to obtain a greater yield, without risk, for the product of the sale.

TAXES, other estimated ANNUAL COSTS and monthly FEES can be considered without a calculator. You only have to subtract it from the rent (if you are a potential seller).

BUT IS VERY IMPORTANT CONSIDER INFLATION (of the rent) AND REVALUATION (of the house). It's very difficult that both inflations were the same value.

CONSIDER that if the house get a higher value very soon, you probably would had prefered not to sell the house, but if the value of the house neither up neither down, you probably would had prefered to sell it.

AND, WHAT ABOUT INFLATION? The more inflation the more rent, absolute value, of course, because every year you recalculate the new rent.

So, consider INFLATION of rent prices and INFLATION of houses is more important than a good subtraction of the taxes, costs and fees.

Nevertheless, it's very good use both calculator and make up one's mind with and without consider both inflations.

This could be a calculator that consider taxes, cost and fees from the ponit of view of a potential seller

SALE PRICE OF THE BUILDING : DOLLARS

MONTHLY RENT BY RENT OF THE BUILDING: DOLLARS

ANNUAL TAXES: DOLLARS

ANNUAL COSTS: DOLLARS

MONTHLY FEES: DOLLARS

AVERAGE ANNUAL RISK FREE INTEREST RATE (CAPITALIZATION RATE):

AVERAGE ANNUAL INFLATION RATE:

AVERAGE ANNUAL REAL-ESTATE PRICES INCREASE RATE:



ACTUAL VALUE OF THE RENTS: DOLLARS

IF YOU ARE A POTENTIAL SELLER, YOU MUST PREFER:

 

 

RENT VS SELL climent.eu