Calculating…
Resources and Definitions
- Structure Value: The value of the building(s) excluding land. This is used for depreciation calculations. You can estimate this as about 70-80% of the total property value for most residential properties.
- Discount Rate: The rate used to determine the present value of future cash flows. It’s typically the risk-free rate plus a risk premium. You can use the 10-year Treasury Yield as a starting point for the risk-free rate.
- Real Estate Professional Status: A tax status that allows individuals who spend significant time in real estate activities to deduct rental losses against other income. To qualify, you must spend more than 750 hours and more than half of your working time in real estate activities.