What you pay for an income property is important, but what you get for your bucks is even more important.

A Certificate of Course Completion is now available for this Course.

      This e-course provides discussions regarding the valuation of income real estate.  It is assumed that students have some prior knowledge of basic real estate concepts and terminology.
      The course will take you step-by-step through the subject of valuing income property, including the meaning of value, a survey of valuation methods, determining cash flow, calculating reserve requirements, determining cap rates, using the methods of professional appraisers, and reconciling the results that come from different methods.  A pre-course quiz will test your existing knowledge of the subject and a final quiz will allow you to see how much you learned.  You may repeat all or parts of the course as many times as desired.  Some of the issues covered in this course are covered from different perspectives in various Web pages throughout the CSES family of Webs.
      This course is a prerequisite to a full understanding of the Buying & Selling Income Property e-course.
      Finally, this course includes information that will allow you to value even unique and/or complex properties.  Certain issues will not be of equal concern in all transactions, or in some cases will be of no concern at all.  If you understand the reasoning behind each issue, you should be able to judge if and to what degree an issue should be of concern in a particular transaction.

Introduction & Overview

• Pretest Your Knowledge

• Review the Real Estate Basics e-course 

• For definitions of terms used that may be unfamiliar, utilize either the public glossary or the much larger  members-only glossary.

Lesson 1 - What Is Value

• Various Definitions

• Valuation vs. Appraisal

Lesson 2 - Cash Flow Analysis

• Definitions

• Example - SFR

Lesson 3 - Valuation Methods

• Survey of the Good, the Bad, the Ugly

• Simple Examples

Lesson 4 - Using An Appraiser

• Definition of an Appraiser

  • Expertise

  • Access to Data

• Advantages & Disadvantage to Using

• How to Select an Appraiser

Lesson 5 - Reserves

• What & Why
• How to Determine
• Example

Lesson 6 - Capitalization Rate

• Definition & Theory
• How to Determine
• Example

Lesson 7 - Valuation Example

• Income Approach Analysis

• Market Data Approach Analysis

• Cost Approach Analysis

• Reconciliation

• More Complex Properties

 Summary & Conclusions

Final Quiz