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Basics

Estimated Home Value

For the purpose of calculating the annual payment required and calculating the value at which underpaid income converts to additional equity rights, we need an updated estimated home value at every year between the date of the initial appraisal and the date of the eventual property sale. Getting an annual appraisal would be too expensive, so instead we make the assumption that the property's value changes in direct proportion to a regional home price index, such as the
.

Input:
Initial Appraised Value
$
0000000
600000
Home Price Index at Investment Date
000
200
Home price Index at year
n
:
000
426

Output:
Interim Home Value in year
n
:
=$
600000
* (
426
/
200
)
=$
600000
*
2.13
=$
1278000

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