What Is My Apartment Building Worth? 3 Key Methods

Figuring out what your apartment building is worth is the first step to making smart investment decisions — whether you're planning to sell, refinance, or simply benchmark your portfolio's performance.

Method 1: Income Capitalization Approach

This is the most widely used method for multifamily properties. The formula is simple:

Value = Net Operating Income (NOI) ÷ Cap Rate

For example, if your building generates $120,000 in NOI and the prevailing cap rate in your submarket is 5%, the estimated value is $2.4 million. The key variables are your actual NOI (gross rents minus vacancies and operating expenses) and the current cap rate in your neighborhood.

Method 2: Gross Rent Multiplier (GRM)

GRM = Purchase Price ÷ Annual Gross Rents. This is a quick back-of-envelope method. If similar properties in your area are trading at a GRM of 14 and your building collects $200,000/year in gross rents, the GRM suggests a value of $2.8 million.

Method 3: Sales Comparison Approach

This method compares your building to recently sold comparable properties (comps) in the same area. Adjustments are made for differences in size, unit mix, age, condition, and location. This is most useful for smaller buildings where rental income is minimal.

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Samimi CRE Advisors provides complimentary institutional-quality valuations for apartment building owners across LA County. Contact us today to find out exactly what your building is worth.