Pub. 1 2016 Issue 5

9 ISSUE 5 2016 䌀吀䄀䄀 吀䠀䔀䌀伀一一䔀䌀吀䤀䌀唀吀䄀倀䄀刀吀䴀䔀一吀䄀匀匀伀䌀䤀䄀吀䤀伀一  Savol, serving the swimming pool service needs of the apartment industry for over 40 years. 91 Prestige Park Circle E. Hartford, CT 860-282-0878 www.savolpools.com CT Reg. 584241 • SP-1 Lic. 285483 • Pump room repairs • Leak Detection • Safety Covers • Tile / Coping • Painting • Openings / Closings One Stop Source for All Your Swimming Pool Needs • Pool Chemicals Delivered to Your Door • Offering Certified Pool / Spa Operator R Courses • Leasing / Financing Options Available THE POWER OF RESPONSE LOCALLY FOCUSED - GLOBALLY STRONG 30 North Plains Industrial Road, Wallingford, CT 06492 | 203.949.8660 | www.BELFOR.com DISASTER RECOVERY PROPERTY RESTORATION FIRE•WATER•STORM•MOLD 24-HOUR EMERGENCY HOTLINE 800.952.0556 Board-Up | Shrink Wrap Smoke & Soot Removal Water Extraction Structural Dehumidification Mold Remediation Odor Removal Reconstruction Contents Restoration Document & Media Recovery Electronics & Machinery Restoration HVAC Cleaning Environmental Services • e better the job you can do, the more like it is that the market will agree with your valuation. • You can better pinpoint market strengths for a particular property. • It’s easier to track the property’s relative investment grade over time. • You can write more accurate forecasts about what is likely to happen with an asset class. • You will be more knowledgeable when selecting a new development site because you will better understand what makes one site better than another. To be as objective as possible, evaluate more than one aspect of a property in your e ort to determine its value. It’s also important to try and recognize any biases you have so you can take them into account. Start by determining the following: • e unit mix for the asset. • Rent per square foot. • A property-level fair market rent. Once that’s done, you need to look at the market as a whole: • What is the market-wide fair market rent? Look at the submarket as well as the overall market, and consider zip codes, too. • How does the apartment complex di er in value from what other apartment complexes are charging? • What is the area’s average household income? • What about employment in the area? • How can taking a view that is both macro and micro help you come up with a better valuation? • Suppose you evaluate a property and determine that a particular property ranks as a B+ in its submarket because it is a high-rise in an already-expensive downtown area. If you look at the market as a whole, however, you might realize that its high fair market rents actually put it into A territory. • Look at another example. Maybe you own a mid- rise that was built during the 2000s in a nice suburb next to a big city. When you look at its submarket or its zip code, it looks like an A- to you. However, the fair-market rents in the nearby city and the presence of an expensive nearby submarket might cause you to downgrade the classi cation to a B. Property classi cation matters because it tells you whether you are charging a reasonable price or not. Simply put, you will enjoy greater, more lasting pro ts if you do your homework and look at the market realistically. Isn’t that the whole point of running a successful business?