Quote:
Originally Posted by Ski Bum
I don't know why one would include depreciation in a financial ROI assessment.
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Depreciation expense determines taxes paid, taxes paid is part of cash flow, and the ROI is an after tax calculation.
To determine the value of a rental property, you use the after tax discounted cash flow over the next 10-15 years, which is the proper way to determine valuation and ROI. . which comes down to a price per sq foot. . . . as the net present value of a commercial rental property
not all real estate investments have a higher disposal value / sale value . . . you may have, but that doesn't mean all. . . .
finance guy