Currently 3 units are rented and 2 are vacant. Bringing in $2,350.
Tenants pay electric.
New roof installed in 2018.
Owner only pays for water at $350 per month.
Unit Break Down of Rents: Unit 1:2/1 Rented for $800 per month Unit 2:1/2 Rented for $800 per month Unit 3:2/1 Rented for $750 per month Unit 4:1/1 Rented for $650 per month Unit 5:2/2 Currently Vacant. Rental Comps $800 to $850 per month
Annual Expense Analysis (Proposed):
Taxes: $5,746
Insurance: $3,000
Building Maintenance: $1,410
Interior/Exterior Decorating: $940
Cleaning/Supplies: $940 Replacement Reserves:
Flooring: $430
Appliances: $307 (Appliances have an estimated life of 15 years)
HVAC: $400 (A/C has an estimated life of 20 years) Total: $13,173
INCOME APPROACH:
Total Gross Annual Economic Income (See Rent Schedule) $47,400
Less Forecasted Vacancy and Collection Loss ( 5% ) $2,370
Effective Gross Annual Income $45,030
Less Forecasted Annual Expenses and Replacement Reserves ( 27.79% of Total Gross Annual Economic Income) $13,173
Net Annual Income from Total Property $31,857
The estimated cap rate is 11%. Therefore, $31,857 / 11% = $289,609
Indicated Value by the Cost Approach: $394,000
Indicated Value by the Market Approach: $412,000
Indicated Value by the Income Approach: $290,000
