- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Future Value of a Lease
Posted on 11/13/13 at 11:08 am
Posted on 11/13/13 at 11:08 am
Was hoping someone on the money board could help me with a time value of money explanation. I'm not well versed in finance. I am trying to determine the value of a lease that is being bought out. For example purposes lets assume the lease has 20 years left and must account for
Inflation, what is the best method for determining a fair price for this lease/property to be purchased at?
If you need more info please let me know
Any advice/explanation helps. Thanks.
Inflation, what is the best method for determining a fair price for this lease/property to be purchased at?
If you need more info please let me know
Any advice/explanation helps. Thanks.
Posted on 11/13/13 at 11:13 am to tigerfan102
Residential/Commercial/Vacant Land? Area? Current value and purpose of lease?
Posted on 11/13/13 at 11:16 am to tigerfan102
We need to know the lease terms and we can calculate Net present value for you.
Posted on 11/13/13 at 11:16 am to BigAppleTiger
Commercial property currently leased to a development company. Property/lease is being purchased. The property value is currently undetermined but I'm looking more for how to determine a value for the lease which has 20 years remaining.
Posted on 11/13/13 at 11:19 am to tigerfan102
Lease is complicated but on average generates $4,000/mo
Payments made monthly, there is a base rent and a % rent but for example purposes lets assume it generates on avg 4k/mo
Payments made monthly, there is a base rent and a % rent but for example purposes lets assume it generates on avg 4k/mo
Posted on 11/13/13 at 11:32 am to tigerfan102
PV of just the payments at 4%(figure I used for inflation) is around $662k.
This post was edited on 11/13/13 at 11:34 am
Posted on 11/13/13 at 11:37 am to southernelite
Can you explain how you solve for these values? If it's easy to do so.
Cliffs will be fine
Thanks
Cliffs will be fine
Thanks
Posted on 11/13/13 at 11:45 am to tigerfan102
To get what he did, use excel:
=PV(.04/12,20*12,4000)= ~ $660k
If you open the function tool in excel, it will explain what each number is. You can then play with the interest rate to adjust accordingly for inflation.
=PV(.04/12,20*12,4000)= ~ $660k
If you open the function tool in excel, it will explain what each number is. You can then play with the interest rate to adjust accordingly for inflation.
Popular
Back to top
Follow TigerDroppings for LSU Football News