If a comparable sale has a net operating income of $1,500,000 and the effective tax rate is 1%, what is the value of the subject property with an expected net operating income of $132,000?

To determine the value of the subject property based on its expected net operating income (NOI) relative to a comparable sale’s NOI, it’s important to understand the relationship between income and property valuation in real estate. The value of a property can often be derived using the income approach, which involves capitalization of the net operating income.

In this case, the comparable property has a net operating income of $1,500,000 and an effective tax rate of 1%. However, for the purpose of determining property value, we typically look at NOI without factoring in taxes, as NOI is usually considered before taxes in income capitalization.

To find the capitalization rate (cap rate) for the comparable property, we divide the net operating income by the value of the comparable property. We need to establish a cap rate for the analysis, but since we don't have the sale price for the comparable, it's implied that we can create a direct value-to-income ratio from the given data.

If we assume the comparable is valued based on its NOI, we use the expected net operating income of the subject property, which is $132,000, to find its value. This is done by considering a proportional relationship based on the comparable’s NOI.

If $1,500,