Menu Close

When is the Price of an income property equal to the Value of the property?


You might not have thought that the price of a property would be different from the value of the same property. But they are for different people.  Bringing these two attributes into balance is key to determining the price you should pay for an income property.

Let’s consider “price”.  A seller wants to sell his income property and move onto another.  He advertises the property for $1M.  You figure he didn’t put it up for sale at his “rock-bottom” price. Everyone leaves a little wiggle room. So you haggle a while and the seller agrees to let you “steal” it for $940,000.

Sometime later, everything seems to be going well and you get an email advertisement for a product that evaluates income properties and calculates its value.  This doesn’t particularly concern you because you beat your seller out of $60K, and that ain’t hay!

Or is it?

Did you just accept the seller’s price as “probably okay”, and then offered something lower for the heck of it?  With a lot of luck, you might have done well.

If, on the other hand, you thought about alternative returns on your money, such as from stocks, bonds, or from a similar income property, you are heading in the right direction. There is only so much money, so make every dollar count.

How?  Figure out how to earn the highest return.  Now you’re on the road to determining “value” to you.

Determining value requires calculations in addition to judgement.  Running the numbers for an income property is the calculations part and it validates the numerical value that you assign it.  We’ve all heard by now that old saying about real estate: location, location, location! This type of selection requires judgement.  A calculator cannot assist you with site selection.  Nor can it help with other attributes of the property such as in choosing a single family property vs. a multi-family complex.  Judgement is needed for much of these decisions, but the numbers always come into play eventually.

This is where that email advertisement for a product that evaluates income property comes to your assistance.  It’s APODPlus, an app that has been around for decades helping owners and investors know their numbers before making a deal.

When evaluating investment choices, you’ll find the return from stocks, bonds and mutual funds easily by looking them up online.  However, returns from real estate aren’t always published and must be calculated in most cases.

With APODPlus, you can see your financial returns for each What If scenario you can think of.  In addition, you’ll quickly see the IRR, NPV, CAP rate, Cash-On-Cash and many other metrics for evaluating the value of the property before you negotiate. You are unique and so is your acquisition strategy. So you’ll manipulate the input fields to quickly see how the changes you made affected the value and other measures of the property.  Pretty soon, you’ll know your numbers well enough to know when you have the best deal.

When you’ve got the best deal, price and value are in balance.  And no doubt you’re feeling pretty successful now.

The Good News Is

You don't have to learn how to calculate the Internal Rate of Return (IRR), the CAP rate, Net Present Values (NPV), or any other formula.  No extensive math or computer skills are needed. Simply enter the income, expenses and a small amount of information and APODPlus will automatically calculate the financial results you need to make the best selection for your investment.

Even Better News Is

You'll keep getting the best deals!

Keep Getting the Best Deal with APODᴾˡᵘˢ

All the information you need to find a leading property, the value of a property and other measures such as NPV, CAP rate, IRR, Cash on Cash, 10-year Cash Flows.  In just minutes, you’ll have an in-depth property analysis.

Buy It Here