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So You Want to be a Landord? Analyzing Potential Properties....
So you want to be a landlord?
 
So you've decided you want to be a landlord. You've picked your niche and you've found a couple potential properties. But are they going to be money makers?
 
Valuing income producing properties is very different from non-income producing properties. Even a single family home should be analyzed based on its cash flow. Therefore traditional methods of Comparative Market Analysis are not useful for income producing properties.There are essentially five methods of valuing income properties.
Price per Unit
This is a great "in the field" analysis. If you're looking at a 6 unit apartment building that's selling for $180,000, then the Price per Unit is simply $180,000 divided by 6 or $30,000. This is a great way to quickly compare properties in similar areas but have more or less units. This is great for your very basic analysis...but obviously a deeper analysis is required.
 
Price per Square Foot
Very similar to the price per unit, to compute P/Sq Ft. you simply divide the price by the number of square feet.  So our 6 unit building with a price tag of $180,000, was 5,000 sq ft... that means the price per square foot ... more

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