real estate

property price

NOI / r-g

user cost

ut= risk free interest rate + risk premium + taxes + maintenance and depreciation - (mortgage interest rate x LTV x marginal tax rate) + (tax on imputed rent x marginal tax rent) - expected price return

equilibrium

P/R = 1/ut

regression (sales comparison)

price property= starting value + effect of the characteristic x property characteristic + other things affecting price

x time rent method (income method)

property value= rent x multiplier

Gross initial yield method (income method)

gross initial rent / gross initial yield

direct capitalisation

NOI / CAP RATE (net initial yield)

cost method

cost of replacement building - depreciation + land value

return on equity

re = rp + D/E (rp-rd)

LOAN TO VALUE

loan amount / property value

interest coverage ratio

ANNUAL NOI / ANNUAL INTEREST

debt service coverage ratio

annual NOI / annual interest + principal

debt yield

NOI / loan amount

gross return

gross rent / investment

net return

net rent / investment

gross income multiplier

investment / gross income

gross initial yield

gross rent / investment

net initial yield

net rent / investment