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I �I <br /> Income Approach <br /> The property is currently owner occupied, therefore in order <br /> � to consider an income approach, it is necessary to determine ! <br /> � an economic rent--what the property would typically rent for � <br /> in the market. <br /> A survey was made for rents of similar type properties. <br /> 1757-1795 North 22nd Street has three buildings rented in a <br /> range of $1 . 20 to 51 . 52 per SF. <br /> 735 South Franklin Street has one building of 11 , 144 SF <br /> rented at $1 .94 per SF. <br /> 60 Industr Court has I <br /> Y partially remodeled warehouse space I <br /> � renting at $1. 80 tb $2. 40 per SF. � <br /> I� � <br /> I Taking into consideration the subject' s condition and loca- �� <br /> ; tion a rental of $1 . 50 per SF would be in line . Rental � <br /> contract is assumed to be typical of the Decatur market with � <br /> the tenant responsible for utilities, interior maintenance, I <br /> and any remodeling, i <br /> I <br /> Expenses are based on the experience of similar properties ii <br /> i in the market. Vacancy and collection loss is estimated at �i <br /> j� 10$ of gross income . Since the property is not assessed, ii <br /> I' the real estate taxes are included as part of the �i <br /> �' capitalization rate. Insurance cost is based on 8� per SF <br /> ' of buildin area or $575 ! <br /> i, 9 per year. Management expense is ;; <br /> estimated at 5$ of effective gross income for this single �� <br /> tenant property. Utility expense is estimated at $30 per �; <br /> � month or 5� per SF of building area to primarily cover �i <br /> i periods when the property is vacant. Snow, yard, and mis- ;; <br /> ,, cellaneous expense items are estimated at $300 per year. i� <br /> � <br /> Repairs are estimated at S50 per month or $600 per year . ;, <br /> Reserves for replacement cover the eventual replacement of '' <br /> items which wear out more quickly than the building itself �� <br /> such as floor and roof coverings, and replacement of any ,' <br /> exterior paving as well as mechanical features. In order to <br /> accumulate an account of $15, 000 at the end of ten years, or ;, <br /> ' based on slightly over $2.00 per SF, it would be necessary ; <br /> ' to put 5985 per year in an account yielding 8�, i <br /> i <br /> � <br /> � ; <br /> � �� <br /> i �i <br /> ;! <br /> ; <br /> I <br /> I <br /> ;i <br /> �! �. <br /> i <br /> �, <br /> ; 23 i <br /> � ii <br /> ---------- -- ----- � <br /> nnT�aFt_1Sc - U;i� ttnRAs��c�c <br />