How much is your investment property worth?

As rents increase, so does the value of your residential income property.  Investors typically use an income capitalization approach to determine the value of rental property. Higher income equates to a higher property value.

Rents in the bay are at an all-time high. According to RealFacts, the average rent in our area for the first quarter of 2014 was $2,043, up 10% from 2013.

In response, over the past two years, apartment building construction has been booming, bringing an estimated 9,000 new units to the south bay alone, according to the SJ Mercury News. As inventory increases, rents may begin to level off somewhat in, which in turn will slow down the appreciation in income property values. If you have been considering liquidating your income property, 2015 may be a good time.