ABC Residential Investors, LLP, is considering the purchase of a 120 unit apartment complex in steel city, Pennsylvania. A market study of the area reveals that an average rental of $600 per month unit could be realized in the appropriate market area. During the last six months, two very comparable apartment complexes sold in the same market area. The oaks, 140 unit project, sold for $9 million. its rental schedule indicates that the average rent per unit is $550 per month. Palms, a 90 unit complex, Is presently renting units at $650 per month, and its selling price with $6.6 million the mix of number of bedrooms and sizes of units for both complexes is very similar to the subject property in both appear to have normal vacancy rates about 10% annually. All rents are net so tenants pay all utilities and expenses. a. Based on the data provided here, how would an appraiser establish an estimate of value? b. What other information would be desirable in reaching a conclusion about the probable value for the property?
ABC Residential Investors, LLP, is considering the purchase of a 120 unit apartment complex in steel city, Pennsylvania. A market study of the area reveals that an average rental of $600 per month unit could be realized in the appropriate market area. During the last six months, two very comparable apartment complexes sold in the same market area. The oaks, 140 unit project, sold for $9 million. its rental schedule indicates that the average rent per unit is $550 per month. Palms, a 90 unit complex, Is presently renting units at $650 per month, and its selling price with $6.6 million the mix of number of bedrooms and sizes of units for both complexes is very similar to the subject property in both appear to have normal vacancy rates about 10% annually. All rents are net so tenants pay all utilities and expenses. a. Based on the data provided here, how would an appraiser establish an estimate of value? b. What other information would be desirable in reaching a conclusion about the probable value for the property?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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- ABC Residential Investors, LLP, is considering the purchase of a 120 unit apartment complex in steel city, Pennsylvania. A market study of the area reveals that an average rental of $600 per month unit could be realized in the appropriate market area. During the last six months, two very comparable apartment complexes sold in the same market area. The oaks, 140 unit project, sold for $9 million. its rental schedule indicates that the average rent per unit is $550 per month. Palms, a 90 unit complex, Is presently renting units at $650 per month, and its selling price with $6.6 million the mix of number of bedrooms and sizes of units for both complexes is very similar to the subject property in both appear to have normal vacancy rates about 10% annually. All rents are net so tenants pay all utilities and expenses.
a. Based on the data provided here, how would an appraiser establish an estimate of value?
b. What other information would be desirable in reaching a conclusion about the probable value for the property?
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