House sale price by capitalization

You can rely on the house market capitalization method to determine the price of your property investment, especially if it is supposed to attract a rental investor to whom you want to sell house quickly. How does it work? Based on your property rent and the rate of return from the house you subtract value. Knowing that the yield is calculated by dividing the annual rent by the price and multiplying the result by 100, you set the price by dividing the annual rent for the profitability and you divide the result by 100. This calculation gives people who say I want to sell my house fast a good idea of whether to sell the house at the price.

Example calculation of profitability: € 140,000 A studio in the nineteenth arrondissement of Paris € 550 monthly rent reported 4.7% (6,600 € in annual rent divided by the € 140,000 multiplied by 100).

Example of calculating the price cap method: our rented apartment in Paris is € 550 per month and reported 4.7%. The price reached € 140,425 (€ 6,600 in annual rent divided by 4.7% return on all multiplied by 100).

The idea is to keep an acceptable return so that you can say I want a house buyer to buy my house. Which means that no oversize housing: the buyer can not compensate for a purchase price too high by increasing the rent, knowing that if this happens it does not lease .