# Property-investment.net

## Before-Tax Cash Flow Calculation: Property Investment …

Apr 02, 2018 · The BTCF is used for the estimation of the return on equity (ROE), that is, the income return on the equity (own funds) invested in the property by the real estate investor. It is also necessary for the calculation of the expected before-tax total return or internal rate of return (IRR) of a property investment.. The annual BTCF can be calculated by subtracting from the annual Net Operating

Actived: Sunday Sep 26, 2021

Detail: https://property-investment.net/2018/04/02/before-tax-cash-flow/

### What is Net Initial Yield? - Smart Property Investment

*(52 years ago)*
Sep 29, 2019 · The net initial yield (NIY), which is the Commonwealth term for the North American term going-in cap rate, is a critical property investment metric because it measures a real estate asset’s income-earning capacity at the time of purchase.The formula for calculating the net initial yield is the following: Net Initial Yield = Net operating income (NOI) in the first year of the holding period ...

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### Going-in cap rate: How to calculate it for your next ...

*(52 years ago)*
Mar 22, 2018 · Going-in cap rate or entry cap rate, or initial yield, as is often referred to, is calculated as the ratio of the projected net operating income (NOI) in the first year of the holding period over the acquisition price of the property. This measure also represents the investor’s income return in the first year, but also in subsequent years, if NOI does not change.

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### How to Calculate the Unleveraged IRR for a Property …

*(52 years ago)*
Jul 28, 2020 · Author: Petros Sivitanides, Ph.D. Dr. Sivitanides is a seasoned expert in real estate investment strategy and analysis, property portfolio modeling and strategic analysis, and real estate market research and econometric forecasting with over 16 years of experience with leading global real estate investment managers and real estate consultants (CBRE Global Investors, AXA Real Estate, Torto ...

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### Exit Cap Rate: A Key Figure in Estimating the Resale Price

*(52 years ago)*
Jun 21, 2018 · Actual Resale Price = 100,000 / 0.085 = $1,176,470. So, if the actual exit cap rate upon the resale of the property is 50 basis points higher than the one used in the analysis at the time of acquisition, then the estimated resale price would be 6.3% higher than the actual resale price. That means that by using a 50 basis points lower cap rate ...

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### NPV and IRR: How are they Linked? - Smart Property …

*(52 years ago)*
Dec 26, 2019 · Dec 26, 2019 · NPV and IRR are two very commonly used terms in property investment analysis and evaluation. They are also linked through a mathematical relationship. NPV, which stands for Net Present Value, is the present value of all cash flows (revenues and expenses) of the property under consideration over the investor’s planned holding period.

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### How to Calculate the Leveraged IRR for a Property …

*(52 years ago)*
Sep 01, 2019 · A leveraged IRR calculation is required when evaluating a real estate investment in which the investor intends to borrow a percentage of the money required to acquire the property under consideration. The term IRR stands for internal rate of return, which is the most commonly used measure for evaluating real estate investment performance.

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### Property Valuation: What is the Adjusted Sales Price?

*(52 years ago)*
May 11, 2019 · One of the most common property valuation techniques is the technique of sales comparables. The other two main valuation techniques is the income capitalization approach and the replacement cost approach. Real estate investors looking at property valuations using the sales comparables technique need to understand that it involves significant judgement on the part of the valuer in deriving a ...

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### Smart Property Investment

*(52 years ago)*
Smart Property Investment. Articles on real estate investment analysis and assessment, investment strategies, market and property targeting, and market research for Los Angeles, New York and Chicago. Get automatic notifications for every post that we publish! Email*. Home.

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### Recapture premium: What it is and how to calculate it …

*(52 years ago)*
Apr 11, 2018 · The recapture premium actually represents the return OF invested capital (in addition to the required return ON invested capital which is actually the required return on equity).). A recapture premium needs to be applied, independently of whether the investor intends to hold the property for three or 100 years because of the physical and functional depreciation that any property is subject to ...

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### Difference Between IRR and Discount Rate

*(52 years ago)*
Jun 02, 2019 · The difference between the Internal Rate of Return (IRR) and the discount rate in property investment analysis is that the former represents an expected return while the latter represents a required total return by investors in properties of similar risk.. The IRR is an expected return on a property investment given an acquisition price, the expected net cash flows of the property over the ...

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### Self-storage REITs Outperformed All Other in the Last …

*(52 years ago)*
Nov 11, 2019 · Based on annual performance data provided by the National Association of Real Estate Investment Trusts (NAREIT) over the period 1994-2018, self-storage REITS registered the best performance both in terms of absolute return and risk-adjusted return.. Real estate investment trusts (REITs) are operating companies that own, operate or finance income-producing real estate assets.

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### NOI Growth: Drivers and Performance by Property Type

*(52 years ago)*
Feb 22, 2020 · NOI is the abbreviation for net operating income, one of key metrics of the income earning capacity of a property.NOI growth is a key factor for achieving high returns when investing in real estate assets. The reason for this is that when a property’s NOI increases after it is acquired by the investor the return on investment gets double boost.

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### Estimated Rental Value (ERV) - Smart Property …

*(52 years ago)*
Jul 14, 2019 · Estimated rental value (ERV) is the open market rent that a property can be reasonably expected to attain given its particular characteristics, condition, amenities, competitive position, location and local market conditions. In other words, it is the market rent for the particular property at a given point in time.

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### Required Rate of Return on a Property Investment

*(52 years ago)*
Jun 10, 2018 · The required rate of return for a property investment has two components: capital return and income return. According to data regarding the investment performance of institutional real estate holdings, the income return for the major property types (apartments, retail, office and industrial) ranges typically between 5-8%.It is calculated as the ratio of the property’s Net Operating Income ...

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### Rent increases and property value gains: What causes …

*(52 years ago)*
Apr 19, 2018 · Apr 19, 2018 · Based on this discussion, we can identify two broad principles of value and rent increases, with the condition that the market is at equilibrium (neither over-supplied nor under-supplied): (1) An increase in the demand for space or properties while supply remains constant. (2) A decrease in the supply of space or properties while demand remains ...

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### Potential Gross Rent (PGR): Use it Only with Other …

*(52 years ago)*
Jan 26, 2020 · Jan 26, 2020 · Potential Gross Rent (PGR): Use it Only with Other Income Metrics. According to Greer and Farrell (1993) the potential gross rent (PGR) is the total rent that a property can produce when it is fully occupied and all tenants pay market rents. Although the PGR is a useful number to know when evaluating a property for investment purposes, it has ...

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### Capitalization rates: Identifying markets for higher ...

*(52 years ago)*
Mar 04, 2018 · Capitalization Rates: Identifying Markets for Higher Capital Gains. Smart property investors should be looking for properties that are likely to increase in value because that is how they will stand to achieve capital gains when they sell their property investment. As explained in my post regarding the thinking framework for smart real estate ...

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### What IRR partitioning is and why it is very useful to ...

*(52 years ago)*
Jun 15, 2020 · IRR partitioning decomposes the IRR to two components: the return attributable to its operating cash flows and the return attributable to capital gains from the resale of the property.. Note that the IRR is calculated based on the expected before-tax-cash-flows (BTCF) of a property over the planned investment horizon. The BTCF equals the net operating income (NOI) of the property in case that ...

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