Welcome, investors! Here at Gulf Coast Property Management, we work with rental investors in Manatee and Sarasota counties in Florida. Today we're going to be talking about the three ways people value property, whether that be a cost analysis, a sales analysis, or an income analysis.
Cost Analysis
The cost analysis is used by the big corporations, where they calculate the land value and build value, and work backward from there. Most of our clients work in either sales comparison analysis or the income analysis.
Sales Analysis
The sales comparison is where we look at a property, decide how much that property's worth based on real estate comps, and then factor in what we believe will be a good rental rate. The focus is very much on the value of the property, it's what most mom and pop investors lean towards when they're deciding whether a property will be good for a rental program.
Income Analysis
The other way to look at an analysis is the income analysis, and that's where you do look at the value of the property, but the main focus is on the potential revenue or historic revenue that property has yielded over the years. Typically, a duplex or a quadruplex, a small multi-family, will be looked at more on the income it can generate, rather than the sale value of the particular building.
Now, there's not a right or wrong way to do it, but you probably do want to speak to a real estate professional, a company like Gulf Coast, who can look at the income and revenue opportunities for you, so you can determine whether or not rental is a good fit.
If you have any more questions please give us a call (941) 782-1559.
Interested in learning more about Investment property ownership? Read our blog about the best type of properties to buy as an investor.
Hungry for more? Check out the two blogs below or visit our Owner Resource Center here to find answers to all of your questions. Or give us a call at (941) 782-1559, we'd be happy to answer any questions you may have.
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