Home arrow Mortgage Forums arrow Budgeting and Personal Finance arrow

Net Income Multiplier
Author Message
Bookmark
Bookmark Delicious Add to del.icio.us
Bookmark Yahoo Web Add to YahooMyWeb
Bookmark Simpy Small Add to Simpy
Bookmark Blinklist Add to BlinkList
helping user

Guest
Post Posted: Wed Nov 30, 2005 10:06 pm    Post subject: Net Income Multiplier
Like 0
Dislike 0
Net income multiplier is a financial tool that is used to estimate the Market value of income generating properties.
_________________
Need help choosing the right loan? Get free consultation from community lenders/consultant
Icon Mini Profile Jessica
Jessica
Community Mentor
Community Mentor



Joined: 08 Jun 2004

Posts: 808
Location: OHIO
435.63 Dollars($)
Post Posted: Wed Nov 30, 2005 10:48 pm    Post subject: RE:
Like 0
Dislike 0
Hi,

Helping User has given you a brief explanation on Net Income Multiplier (NIM).

NIM and Cap rate are both financial tools used for same purpose. But cap is better known and widely known. They both produce the same result when we estimate the market value of an income generating property. Since NIM is inverse of cap rate therefore NIM is equal to 100 divided by cap rate and cap rate is equal to 100 divided by NIM.

Accurate and current financial data of sale of comparable property is needed when we use Net Income Multiplier to estimate the market value of a income generating property.

Calculation of NIM has been explained below through an example.

A residential property in Idaho has a market value of $200000 and a net operating income of $ 20,000.

Net Income Multiplier = Market Value / Net Operating Income
= 200000 / 20000
= 10


Thanks,
Jessica
Ethan

Guest
Post Posted: Thu Dec 01, 2005 8:44 pm    Post subject:
Like 0
Dislike 0
Hi,

That is an informative post. But Jessica you have mentioned a term "Net Operating Income". What does this mean?

Ethan
Icon Mini Profile Jessica
Jessica
Community Mentor
Community Mentor



Joined: 08 Jun 2004

Posts: 808
Location: OHIO
435.63 Dollars($)
Post Posted: Thu Dec 01, 2005 8:55 pm    Post subject: RE
Like 0
Dislike 0
Hi,

Welcome to the Forums.

Net operating income is the equal to properties gross income annually minus operating expenses.

Gross Income includes both rental income and other income like parking fee, Laundry and vending receipt etc. (All the income associated with the property). And operating expenses incurred for the operation and maintenance of the property like repairs, taxes, utilities etc.

Amortization of loan points, principle and interest, income taxes, depreciation, capital expenditure are not included in operating expenses.

Thanks,
Jessica
Torey

Guest
Post Posted: Thu Sep 30, 2010 10:14 am    Post subject: Adjusted net self employed income
Like 0
Dislike 0
Can you please provide the definition of the above?
Icon Mini Profile jameshogg
jameshogg




Joined: 20 Dec 2005

Posts: 10144
Location: Nevada
941.32 Dollars($)
Post Posted: Thu Sep 30, 2010 9:44 pm    Post subject:
Like 0
Dislike 0
Hi Torey,

As far as I know, net self-employment income is the gross income from a trade or business minus the allowable deductions for that trade or business.

Thanks
Quick Reply
Your Name
Subject
Image Verification


Can't read the image? click here to refresh
Message body

All times are GMT - 7 Hours
Page 1 of 1