Calculating the value, income, and rate of return on Banning CA Commercial real estate investments need not be complicated. Here are three monetary aspects of an investment that share a mathematical relationship. They can help you determine a tangible return on a Banning CA investment like commercial Banning CA retail, Banning CA office, Banning CA industrial and Banning CA multifamily real estate:
- Value: The cost or market value of a Banning CA property.
- Income: The estimated annual income the Banning CA property can produce.
- Rate of Return: An annual percentage return on the Banning investment.
To calculate the value of a Banning CA income property, simply divide the annual income by the rate of return, or:
VALUE = INCOME/RATE OF RETURN
To calculate the income of a Banning CA income property, simply multiply the rate of return by the market value, or:
INCOME = RATE x VALUE
To calculate the rate of return of a Banning CA income property, simply divide the income by the market value, or:
RATE OF RETURN = INCOME/VALUE
Keep in mind the rate of return should not be confused with the Capitalization Rate, also known as the Cap Rate.