1. What is the House Value Calculation?

The income approach calculates property value based on its income-generating potential. This method is commonly used for rental properties and commercial real estate investments in Singapore's market.

2. How Does the Calculator Work?

The calculator uses the income approach formula:

Where:

• \( NOI \) — Net Operating Income (annual rental income minus operating expenses)
• \( Cap\ Rate \) — Capitalization Rate (decimal percentage representing expected return)

Explanation: This formula estimates property value by dividing the net operating income by the capitalization rate, which reflects the investor's required rate of return.

3. Importance of Property Valuation

Details: Accurate property valuation is essential for investment decisions, mortgage applications, property sales, rental pricing, and financial planning in Singapore's competitive real estate market.

4. Using the Calculator

Tips: Enter NOI in SGD per year and Cap Rate as a decimal (e.g., 0.05 for 5%). Both values must be positive numbers for accurate calculation.

5. Frequently Asked Questions (FAQ)

Q1: What is considered a good Cap Rate in Singapore?
A: Cap rates vary by location and property type, but typically range from 2-6% in Singapore, with lower rates in prime locations and higher rates in suburban areas.

Q2: How do I calculate NOI accurately?
A: NOI = Gross Rental Income - Operating Expenses (property tax, maintenance, insurance, management fees, vacancies).

Q3: Does this calculator work for all property types?
A: This approach works best for income-generating properties like rental apartments, commercial spaces, and investment properties.

Q4: How often should I update my property valuation?
A: Property values should be reassessed annually or when significant market changes occur, such as interest rate adjustments or major economic shifts.

Q5: Are there other valuation methods I should consider?
A: Yes, you should also consider comparative market analysis (comparable sales) and cost approach for a comprehensive property valuation.