Property Evaluation Techniques

[Travis S.]

What are some of the techniques you guys use to determine the value and/or monthly rent of a property ?

For example: I use the "Five Step Property Evaluation" technique from the book "The ABC's of Real Estate Investing" forword by Robert Kiyosaki & writen by Ken McElroy.

1. Verify property income
2. Verify expenses.
3. Determin net operating income (NOI).
4. Find the capitaliztion rate and valuation.
5. Calculate the loan payment and you profit or cash on cash.

Do you guys have any other quick way to determine the value of a property and/or monthly rent ?

[Travis S.]

Originally posted by "charles whitaker":
Location, area comps, size, and functionality are all factored into the retail value price. Realtors can help with the comps or sometimes you can find yearly housing reports which are somewhat close to the actual value.

What I meant was how do you personally figure out the value, What are your techniques ?

[Jason Barnett]

If I'm trying to get a quick read on a house then I will ask for the selling price and the rents. Monthly Rent * 100 = my Maximum offer and if the property is more expensive than this then I don't bother. Of course I'm aiming for positive cash flow which may / may not be possible in your area.

In any case after I use the Rule of 100 above to screen properties I start looking at the ROI. What's the Net Operating Income divided by the purchase price of the property? I always want more than 10% (because I could just buy stocks) and obviously the higher the better.