Home  Journals  Financial Analytics: Science and Experience  8(20) – 2009 August

About the recurrent equation for the capitalization rate of the net operational income from real estate rent

Available online: 26 August 2009

Subject Heading: Business valuation

JEL Classification: 

The method of direct capitalization for the defining the investment real estate cost is regarded. The capitalization rate can be calculated from the earlier defined approximate recurrent equation, if there is a certain approximation for ?-factor of the SARM model, calculated by the common statistic formula, where the accidental real estate profitableness is substituted by the appropriate accidental exchange rate of the net operational income. The appropriate approximation was suggested earlier. It enables to close the model and get practically important methods for the prognostication of the capitalization rate. A new limit term for the approximate recurrent equation is suggested and the digital prognostication model of the exchange rate of the net operational income and of the appropriate capitalization rates is regarded.

Keywords: real estate, evaluation, market, value, method, capitalization, profit, discount rate, exchange, income

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ISSN 2311-8768 (Online)
ISSN 2073-4484 (Print)

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