How To Value A Property.
There are many rules that people use for placing a value on a property, but I am not sure how well they work for special scenarios. One rule says that a building is worth 10 times the yearly rents. This does not seem to work well for single family homes.
A duplex in a very nice section of town would certainly be valued differently than a duplex in a bad neigborhood.
I am trying to determine if a duplex I own in Columbus, Ohio is overvalued or undervalued. It is in a nice section of town and I always get good tenants. Each side rents for 850$.
Any formula I have used over the past 12 years always seems to give me a value much less than the value I get by comparing it to similar properties.
I guess I am just trying to get a handle on the possibilities of appreciation in the near and long term.
For a duplex in Columbus, comparable sales will dictate the value of your property. Forget the formulas for anything of four units or less -- use comparable sales because that is what the appraiser will do.
You may want to claim the value of your property is 10x gross rents, but the buyer may claim that the maximum value to him is 6x gross rents. When you get to the settlement table, the value of the property is the amount a ready and willing buyer will pay.
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