Step 5

Step 5. List Extra Profit Items and Factors
Any mortgage interest saving under 6% enter
annual saving here $
If Parking or Garages available, 1 per tenant,
whether free or not. For Parking enter 5%;
for Garages 8% of AWI
If Janitor Service is not supplied enter 5%
of AWI here
If all electric bills are paid by the tenant
enter 2% of AWI here
Step 6. Add total of all items in Section II including
PAI. Total is Final Adjusted Income. Enter here
Step 7. Multiply Final Adjusted Income by 6% (or
divide by 3 and multiply by 20). Result is
GROSS VALUE. Enter here
Step 8. Enter cost of repairs required to put property
in reasonable condition here .
Step 9. Deduct cost of repairs from Gross Value.
Balance is Fair Market Value of Property.
Enter here
Copyright 1960. Order these forms direct from: Real forms, Box 1, Brookline, Mass.
Let us do the Value Formula for a typical Aunt Toby un-heated and for a heated one to see how it works. Here are the figures on the Freeman group of Aunt Tobys as they were presented to me by Jack.
Income rents per year $5,880
Taxes $721
Water 60
Insurance 113
1st Mortgage, Interest, and Principal $24,000 at 4%
(standard rate in those days) 20 year basis $1,752.48
Interest and Principal on 2nd mortgage at 4%, 10 years 364.56