Home  Journals  Financial Analytics: Science and Experience  14(38) - 2010 October

About the adoption of the formula connecting the rates of real estate cost changes and the net operational income flow

Available online: 25 October 2010

Subject Heading: ESTIMATION OF THE BUSINESS

JEL Classification: 

It is regarded the task of prognostication of the change rates of the net operational income flow from the real estate rent depending on suggested change rates of its cost. It is received a final formula connecting the real estate cost changes and the net operational income flow from its rent. It will enable to adopt this model to the rates and get a recurrent equation for the real estate cost prognostication depending on the prognosis of the net operational income flow change received from its rent. Such model can be used for the prognostication of real estate sales price in the discounting method of the net operational income flow, if a rent rates prognosis for several years is known from the market survey.

Keywords: business, assessment, market, value, income approach, method, discounting, discount rate, capitalization rate, Gordon formula, net operational income

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

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