Real Estate Math Formulas

Question 1

Area of a Triangle

Answer 1

1/2 (Base*Width)

Question 2

1 acre in square feet

Answer 2

1 acre = 43,560 square feet

Question 3

1 square mile in acres

Answer 3

1 square mile = 640 acres

Question 4

1 section in miles

Answer 4

1 section = 1 mile x 1 mile

Question 5

1 section in acres

Answer 5

1 section = 640 acres

Question 6

1 township in sections

Answer 6

1 township = 36 sections

Question 7

1 mile in feet

Answer 7

1 mile = 5,280 feet

Question 8

1 mile in rods

Answer 8

1 mile = 320 rods

Question 9

Volume equation

Answer 9

Volume = width x height x depth

Question 10

Volume of triangle

Answer 10

(Base * Width * Height) / 2

Question 11

Monthly Assessment equation

Answer 11

= (Total Annual budget * Condo unit as % of value) / 12

Question 12

Percentage Lease Rent Calculation

Answer 12

Monthly Rent % = Sales x % Sales charged

Question 13

Gross Rent Multiplier =

Answer 13

Sales Price / Monthly Rental Income

Question 14

Gross Income Multiplier =

Answer 14

Sales Price / Annual Income

Question 15

Cost Approach Formula

Answer 15

Value = land value + (Improvements + Capital Additions - Depreciation)

Question 16

Annual Depreciation =

Answer 16

Beginning Depreciable Basis / Depreciation term

Question 17

Income Capitalization Formula

Answer 17

Value = NOI / Cap Rate

Question 18

NOI =

Answer 18

Potential rent - vacancy loss + other income - operating expenses

Question 19

How many points yields 1% on a loan?

Answer 19

8 points yields 1%

1 point yields .125%

Question 20

Total Interest on an Interest Only Loan

Answer 20

= Loan amount * rate * term in years

Question 21

Total interest on an amortized loan

Answer 21

= ( Monthly PI payment * 12 * term ) - loan amount

Question 22

Loan Constant =

Answer 22

Monthly Payment / Loan amount * 1000

Question 23

LTV

Answer 23

Loan / Value of Home

Question 24

Income Ratio Qualification

Monthly Principal & Interest (PI) =

Answer 24

Income Ratio * Monthly gross income

Question 25

Debt Ratio Calculation

Answer 25

= (Housing Expense + Other Debt Payment) / Monthly Gross Income

Question 26

Total Appreciation =

Answer 26

Current Value - Original Price

Question 27

Equity =

Answer 27

Current Market Value - Loan Balance

Question 28

What does NOI Not include?

Answer 28

Debt payments

Question 29

Cash Flow =

Answer 29

NOI - Debt Service

Question 30

ROI

Answer 30

= NOI / Price

Question 31

Investment Property Tax Liability

Answer 31

(NOI + Reserves - Interest Expense - Depreciation) * Tax Bracket

Question 32

ROE

Answer 32

Cash Flow / Equity

Question 33

Converting Mill Rates

1 mill =

Answer 33

$.001

Question 34

Tax using mills

Answer 34

= Taxable Value / 1000 * Mill Rate

Question 35

Tax Bases =

Answer 35

Assessed valuations - exemptions

Question 36

Tax requirement =

Answer 36

Tax Base * Rate

Question 37

Sale Price to Net an Amount

Answer 37

Sale price = (Desired net + closing costs + Loan payoff) / (1-Commission Rate)

Question 38

Recovery with Co-insurance

Answer 38

Recovery = Damage Claim * (% replacement cost covered/minimum coverage requirements)

Question 39

Capital Gain =

Answer 39

Amount realized - adjusted basis,

where

amount realized = price - selling cost and

Adjusted Basis = beginning basis + capital improvements - total deprecation

Question 40

Depreciable Basis =

Answer 40

Initial Property Value + Capital Improvements - Land Value