There are several ways to value an investment or rental property, depending on your purpose and preference. Here are some of the most common methods:

• **The Sales Comparison Approach (SCA)**: This method compares similar properties that have sold or rented locally over a given time period, and adjusts for differences in features, size, location, condition, etc. This method is widely used by appraisers and real estate agents when they evaluate properties. Price per square foot is a common and easy-to-understand metric that you can use to determine where your property should be valued.

• **The Income Approach**: This method calculates the amount of income the property is likely to produce, based on factors such as rent, vacancy rate, operating expenses, taxes, etc. There are two main ways to apply this method: the capitalization rate and the gross rent multiplier. The capitalization rate (or cap rate) is the ratio of the annual net operating income (NOI) to the purchase price or market value of the property. The higher the cap rate, the higher the return. The gross rent multiplier (or GRM) is the ratio of the purchase price or market value of the property to the annual gross rental income. The lower the GRM, the higher the return.

• **The Cost Approach**: This method estimates the value of the property by adding the value of the land and the value of the improvements (such as buildings, structures, etc.) minus depreciation. The value of the improvements can be determined by using the replacement cost method, which calculates how much it would cost to rebuild or replace them with similar materials and quality.

• **The Capital Asset Pricing Model (CAPM)**: This method is based on the idea that investors require a certain rate of return for investing in a risky asset, such as a rental property. The CAPM formula is: Expected Return = Risk-Free Rate + Beta x (Market Return – Risk-Free Rate), where Beta is a measure of how much the property’s returns vary with the market returns, and Risk-Free Rate is the return on a safe investment, such as a Treasury bond.