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1610d · Quote Me
"All income property is valued by it's income stream. It's a margin asset. I call it, "Dollar and a Dime Real Estate." You wouldn't put a dollar in the bank if they only gave you back 95 cents. It has never been any different. It is a basic formula Income / Rate = Value. Now there are additions and subtractions to the income like taxes, maintenance, and depreciation, etc., but the formula stands. This cuts both ways for 1) more housing and 2) less housing. The land absorbs all increased or decreased value. The first five words of the preamble of the National Association of Realtors is, "Under all is the land." We can build them or bulldoze them, increase the zoning or decrease it, but whatever, the value is absorbed by the land." PJ Grube Real Estate Broker