need help determing value of property

when determing the value of a property 5 unit apt complex what formunla should I use? ???

No replys hummmmmmmmmmmmm

I would think that if a property had a GOI of say 25,000 and a NOI of 10,000 would the property be worth 100,000 = 10% return good or bad some help please

Howdy Islander:

The income approach is one way to determine value at a 10% cap rate would be about right for a good quality 5 plex in general. A low income hard to manage property would command a higher cap rate maybe even 15%. A higher class newer building would demand a lower cap rate of perhaps 6 to 8%.

Market conditions may demand lower even lower cap rates. I was just discussing with a Seattle investor last night the same problem. She is considering the purchase of a $330,000 duplex that only rents for $800 per side. If you figure this income and even zero expenses the cap rate is less than 6%. Add in taxes and insurance and a little vacancy and maintenance and the cap rate would be about 3%.

Replacement costs are also figured in an appraisal but are not given the weight that income and market conditions.

The best way to determine the value is to look at several sold comps in the area and compare. I would only use cap rate as a rule of thumb or a means of quick comparison.

Hope this helps. LOL

Thanks for the reply. it helps