Real Estate Mathematics Concepts and Property Tax Proration

Flashcards covering real estate mathematical conversions, formulas for interest, taxes, and commissions, and property tax proration steps based on Indiana's arrears system.

7.847 rounded to two decimal places

$$7.85$$

8.654 rounded to two decimal places

$$8.65$$

Feet in one mile

$$5280$$

Square feet in an acre (per transcript)

$$43500$$

Square feet in one square yard

$$9$$

Acres in a Section (per transcript)

$$640,000$$

Days in every month (for math calculations)

$$30$$

Days in every year (for math calculations)

$$360$$

Front foot

The measurement of a parcel of Land by the number of feet of Street or road frontage

Interest Owed ($) formula

$$\text{Loan Amount} \times \text{Interest Rate (\%)} = \text{Interest Owed (\$)}$$

Taxes Due ($) formula

$$\text{Assessed Value} \times \text{Tax Rate (\%)} = \text{Taxes Due (\$)}$$

Minimum Sale Price formula

$$\frac{\text{Dollars Seller Wants}}{\text{\% Seller Keeps}} = \text{Minimum Sale Price}$$

Percentage of Profit formula

$$\frac{\text{Dollars in Profit}}{\text{Original investment}} = \text{\% of Profit}$$

Commission Earned formula

$$\text{Sales Price} \times \text{Commission Rate} = \text{Commission Earned}$$

Net Operating Income formula

$$\text{Rate of Return} \times \text{Value} = \text{Net Operating Income}$$

Area of a Rectangle

$$\text{Width} \times \text{Depth}$$

Area of a Triangle

$$\frac{1}{2} \times \text{Width} \times \text{Depth}$$

Appraised Value formula

$$\text{Annual Interest (\$)} \div \text{Interest Rate (\%)} \div \text{LTV Ratio (\%)} = \text{Appraised Value}$$

Arrears

Paying after the fact; in Indiana, property taxes are paid in this manner.

May Tax Installment

The payment for taxes accrued from Jan 1 - Jun 30 of the prior year.

November Tax Installment

The payment for taxes accrued from July 1 - Dec 31 of the prior year.

Cost Per Day (Tax Proration)

$$\text{Annual Taxes} \div 360$$

Seller's tax obligation: Closing BEFORE the May bill is paid

Seller owes for ALL of Last Year ($1,800$ in the provided example).

Seller's tax obligation: Closing BETWEEN the May and November bills

Seller owes for $\frac{1}{2}$ of Last Year ($900$ in the provided example).

Seller's tax obligation: Closing AFTER the November bill is paid

Seller owes NOTHING for Last Year.