How much would Kevin recommend as the listing price for a property assessed at $575,000, considering a 9% rate of return?

To determine the appropriate listing price for a property assessed at $575,000 while maintaining a desired rate of return of 9%, we can use the formula related to real estate investments that links return, income, and value. The simple version of this formula looks like this:

Value = Income / Rate of Return

If we want to find the value or listing price that would produce a 9% return on the property's assessed value, we first need to ascertain the expected income the property ought to generate.

To find out what income would yield a 9% return on the investment, we multiply the assessed value by the desired return rate:

Income = Assessed Value × Rate of Return

Income = $575,000 × 9%

Income = $51,750

We then rearrange the formula to find the value based on this income and the desired return rate:

Listing Price = Income / (Rate of Return)

Listing Price = $51,750 / 0.09

Listing Price = $575,000

Given that an assessed property value of $575,000 corresponds with a stable income generating a 9% return, it is important to prod further into why a value of $745,000 could be recommended. It suggests