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Valuation for apartment
Andre2000
#1 Posted : Wednesday, February 23, 2022 5:54:30 PM
Rank: New-farer


Joined: 9/25/2017
Posts: 15
Location: London UK
Hi

Could anyone give an indication of cost for a simple Valuation of a 2 Bed apartment. Also this apartment makes approx 220k per month via Airbnb This would be included in the valuation.

Andre
Jon Jones
#2 Posted : Thursday, February 24, 2022 1:35:47 AM
Rank: Member


Joined: 9/11/2015
Posts: 241
Location: Thika
Ignore Airbnb figures. I have a crude way of valuing residential property.

Monthly rent (not airbnb) = R

Value of apartment = R * 200
Since men have learned to shoot without missing, I have learned to fly without perching
VituVingiSana
#3 Posted : Thursday, February 24, 2022 1:55:30 PM
Rank: Chief


Joined: 1/3/2007
Posts: 17,864
Location: Nairobi
Jon Jones wrote:
Ignore Airbnb figures. I have a crude way of valuing residential property.

Monthly rent (not airbnb) = R

Value of apartment = R * 200

Assuming R is net of all costs (net rent) but BEFORE depreciation, taxes, etc then it's a 6% yield which seems the norm.

Meanwhile the 19yr T-Bond is paying 13% after taxes though there's no inflation adjustment but the "excess" 7% can be reinvested.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Swenani
#4 Posted : Thursday, February 24, 2022 4:41:42 PM
Rank: User


Joined: 8/15/2013
Posts: 13,231
Location: Vacuum
VituVingiSana wrote:
Jon Jones wrote:
Ignore Airbnb figures. I have a crude way of valuing residential property.

Monthly rent (not airbnb) = R

Value of apartment = R * 200

Assuming R is net of all costs (net rent) but BEFORE depreciation, taxes, etc then it's a 6% yield which seems the norm.

Meanwhile the 19yr T-Bond is paying 13% after taxes though there's no inflation adjustment but the "excess" 7% can be reinvested.


Have you factored the capital gains on the property in the 6% calculation?
If Obiero did it, Who Am I?
VituVingiSana
#5 Posted : Friday, February 25, 2022 1:56:21 AM
Rank: Chief


Joined: 1/3/2007
Posts: 17,864
Location: Nairobi
Swenani wrote:
VituVingiSana wrote:
Jon Jones wrote:
Ignore Airbnb figures. I have a crude way of valuing residential property.

Monthly rent (not airbnb) = R

Value of apartment = R * 200

Assuming R is net of all costs (net rent) but BEFORE depreciation, taxes, etc then it's a 6% yield which seems the norm.

Meanwhile the 19yr T-Bond is paying 13% after taxes though there's no inflation adjustment but the "excess" 7% can be reinvested.


Have you factored the capital gains on the property in the 6% calculation?
I know English came by ship but surely you can read "net rent" up there. Laughing out loudly

Since when does rent include capital gains?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
Andre2000
#6 Posted : Wednesday, April 06, 2022 12:54:55 AM
Rank: New-farer


Joined: 9/25/2017
Posts: 15
Location: London UK
Jon Jones wrote:
Ignore Airbnb figures. I have a crude way of valuing residential property.

Monthly rent (not airbnb) = R

Value of apartment = R * 200


Seems about right!!

TA
My 2 cents
#7 Posted : Thursday, April 07, 2022 7:47:44 PM
Rank: Veteran


Joined: 6/2/2010
Posts: 927
Recently sold a flat and this math worked out PERFECTLY.
Sale price was 200 times the monthly rent I was getting. (Though the most recent rent factored in a pandemic discount)

Sold because am not cut out to be a landlord. Bought shares instead.
Dividend on the said shares are 2.5 times the rent I was getting on the flat. All without the hustles involved with being a landlord.
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