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What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures, Updated Edition, 2nd Edition by Frank Gallinelli

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CHAPTER 26Calculation 20: Price, Income, and Expenses per Unit

What It Means

Like several other measurements we’ve discussed, these are not offered for their sophistication or insight. Some investors and brokers still use these, and for that reason, it’s essential that you know what they mean.

And they mean exactly what they say. Take a property’s price, gross scheduled income, or total operating expenses and divide that amount by the number of rental units. For example, if a building has 20 rental units and is offered at $400,000, then its price is $20,000 per unit.

Those who use this technique usually do so only with residential properties (i.e., apartment complexes) because the units in such properties tend to be more uniform in their ability ...

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