An Overview of Real Estate and the Appraisal Report. Presented by: Guy J. Bourgeois, AACI P.App, . Bourgeois and Company Ltd. Providing Real Estate Appraisal and Advisory Services to Western Canada since 1979.
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Guy J. Bourgeois, AACI P.App,
We Research, study, and analyze individual market segments in Multi-family Residential, Commercial and Industrial Sectors in Edmonton since 1994.
We have a subscription to all real estate transactions in Alberta from land titles office.
The Edmonton and region investment, industrial, commercial and land sales transactions are extracted and researched and input into our data base.
All sales are inspected and photographed and vendors, buyers and realtors are contacted for details regarding each sale.
Any questions about us??????
What is involved in calculating a cap rate?
What information do we need?
Is a Cap rate a “rate of return”??
Or is it just a relationship?
A cap rate is only a rate of return if the property is purchased on an all cash basis – That’s one reason all appraisals are completed on the assumption that no financing exists.
Yet the influence of financing is always inherent in the cap rate correlation, because financing is an important part of the decision to buy and all comparables used to calculate a cap rate are bought conditional on financing.What is a Cap Rate???
From comparables sales data……
Cap Rate = Net Income Sale Price
- Actual rent vs. market rent
- Actual expenses vs. market expenses
- Actual vacancy vs. market vacancy
- How good is your data??
This analysis is the most indicative of the overall market in Edmonton in the last 5 years.
Although these are apartment sales both the commercial and Industrial market has reacted the same way.