Can something as simple as the treatment of reserves alter the valuation — or evaluation — of your income-property investment?
This is a discussion that comes up every year when I teach real estate investment analysis to my grad students: Where, how, why do you deal with "reserves for replacement?" What difference does it make where you put them in your financial work-up on an income property?
As they say in Congress, where you stand depends on where you sit; and your handling of reserves can be driven to a great extent by what your agenda is.
Get my take on this in my latest article.
-- Frank Gallinelli
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