- has local market specific data INCLUDED
- no new hardware, software, or installation required
- is web based with real time market data updated quarterly and/or annually
- offers the ability to work in more than one time period
- is customizable to any market or region (group of markets)
- is automated and ready to use via a secure log in
- can be tailored to specific applications and client requirements
- addresses obsolescence and more
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for Commercial Real EstateIncomeWorks, designed for commercial, industrial, & multifamily real estate evaluation, is an automated income analysis based on local market specific data that are professionally collected, confirmed, organized, and evaluated.
IncomeWorks is an automated income approach evaluation model for most commercial, industrial, lodging, multifamily, office, and retail real estate. IncomeWorks is a product and a process that collects and analyzes local lease practices and data. Just input readily available information pertaining to a property, such as size & age, and IncomeWorks will return an instant evaluation estimate based on local market data.
Cost vs. Value
There are types of properties for which the cost to develop simply is significantly less than the resulting market value,
due to the entrepreneurial expertise of the developer.
For example, retail properties of average construction quality in high traffic locations can often command rents exceeding typical returns on/of site value and the cost to build. This element of value can only be realized by application of an understandable, accurate, and reliable income approach included as part of the evaluation process.
1. Valuation of commercial properties, including apartments, using only the sales comparison method is often skewed by leased fee issues (the majority of these properties are leased... some below market, some above market).
2. Most markets do not have sufficient relevant sales to indicate reliable stratification. Often, single tenant and multi-tenant commercial and industrial properties are lumped together to provide volume for a sample - even though they are totally different investment vehicles for prospective buyers.
3. The Income Approach, if based on researched, verified, and property-appropriate timely data from the local market, can result in an accurate evaluation for most commercial, industrial, & multifamily properties.
Commercial Properties are Complex
Commercial income properties are complex. Help and support by career MAI real estate professionals is not readily available or easily accessible. IncomeWorks has many HELP screens and explanations. Complicated issues are explained in real words and understandable language.
Equitable evaluation of real property MUST have the ability to recognize and measure physical, functional, and economic/external obsolescence as these concepts relate to market value. Obsolescence historically been misunderstood and thus, is often misused; application of unsupported obsolescence factors, for example. Obsolescence is described and measured in IncomeWorks using real percentages.
Obsolescence tests, containing unique criteria, are provided for each property type; specific tests zoom in on discrepancies. Users become familiar with criteria required for true obsolescence; if obsolescence exists, supportable percentages are calculated - if obsolescence does not exist, detailed explanations are provided to help the user.
Local Market SpecificIncomeWorks is NOT a fill-in template! IncomeWorks comes to our customers fully loaded with local market data we survey and expertly analyze. We offer completely automated but absolutely market specific professional valuation assistance.
IncomeWorks provides the local lease practices, professionally surveyed and calibrated to the specific jurisdiction real property stock and preloaded into the individual property type models.
Explains YOUR market
You know your local buildings and surrounding neighborhoods. But do you know why, in a certain situation, an 8% cap rate might be appropriate while a 10% is not? What should or should not be included in a typical operating statement? What is the difference between leased fee, fee simple, and value-in-use? IncomeWorks can help! Complex issues from the market (leased fee vs. fee simple, gross rent vs. net rent, etc.) are identified and explained.
Regional and subregional markets are established for further refinement and indexing to peripheral markets. Local, regional, and national data sources are evaluated; results are verified with sales.
What are Rates?
All rates are expressed as "time and local market relevant" and updated quarterly or annually.
- Rents -- distinguished as 1net, 2net, 3net, absolute net, full service, modified gross, etc.
- Vacancy / Occupancy rates -- by local submarket per type and quality of real estate.
- Expenses -- by local submarket per type and quality of real estate.
- Tenant Improvements -- expenditures characteristic to the submarket.
- Overall Capitalization Rates -- from local (primarily), regional and national market sales data (as appropriate).
- Discount Rates -- relevant locally, regionally and nationally by type of real estate.
The data reported in IncomeWorks reflect the results of comparative data analyses from a number of sources. All data referenced in the program have been selected and then inserted after considerable data collection and interpretation. Derivation of all IncomeWorks economic indicators involves extensive interviews with market participants in order to ascertain that all the required information is complete and accurate. The bases for the economic indicator selections have been compiled via two primary methods: 1) personal MAI surveys by us, and 2) data provided by other market participants and MAI verified by us.
We (Timothy VanKirk, MAI, Linda Pedalino, MAI, and our trained and experienced staff) test each market model for accuracy and completeness and incorporate beta testing procedures from endusers.
Easy! Fast! Accurate!Use IncomeWorks to produce an accurate evaluation, via a market specific income analysis, automatically... in under 5 minutes. IncomeWorks is web based with real time updates of market data, and helps users understand the income approach.
IncomeWorks walks you through the modeling process. Basic is the key word. It is not information overload.
IncomeWorks provides the appropriate components to develop an accurate result, and stores your completed profile in a searchable and sortable format for easy access: change, save, print. Import / Export features in IncomeWorks make it easy to integrate it into any existing software or hardware platform.
Shows the Math
See where your results originate from! No complicated formulas or mystery math.
Compare Your Result
Once a property is ranked, the program suggests a result, and provides explanations along with basis for measuring obsolescence.
Modeling takes from 2 to 5 minutes per property. Experienced users work even faster!
Basic Components & Ranking
IncomeWorks automatically suggests the appropriate local market specific data (economic indicators of rental rate, vacancy rate, expenses, overall capitalization rate, and more), based on the user's ranking. The ranking process is property type specific, intuitive, and easy to complete.
Update a previously completed report from one year to the next with one click! Or... update ALL the reports you’ve done from one year to another, as a group, with Mass Update!
Support is provided with every IncomeWorks release - AT NO CHARGE! Initial training is offered onsite if required - though we have never had to spend more than a couple of hours in initial training since IncomeWorks is user friendly and intuitive for all skill levels. We are available by phone and email to help experienced users get the most out of IncomeWorks. Our HELP screen contains reference material to train and teach users.
One of a KindWhat makes IncomeWorks different? IncomeWorks automatically supplies the appropriate economic parameters (rent, vacancy/occupancy, expenses, cap rate) that are market specific.
NOT a fill-in template!
Many vendors offer “income approach” templates but ALL these templates require the user to find and input the data. We do the market surveys and test the program for accurate results. We offer solid qualifications for commercial real estate valuation. Our expertise is unmatched by the numerous vendors offering fill-in template AVMs.
IncomeWorks is web based for quick release as a standalone product into any market. You can even elect to have automated updating in your release - update a previously completed report from one year to the next with one click!
No - No - No - Yes!
No new hardware required. No new software required. No installation required. IncomeWorks is designed for any environment... all you need is an Internet connection.
IncomeWorks is protected by a U.S. Patent! The awarding of a U.S. Patent proves that IncomeWorks met two rigorous and comprehensive criteria: 1) it is novel or "different from any device, system, or known method in the relevant technology area" and 2) it is non-obvious to one of ordinary skill in the art. The inclusion of market derived & real time economic parameters (rent, vacancy, expenses, cap rate, obsolescence measurement, discount rate, rates of change and more) that are property specific and location-specific is the most innovative and unique aspect of IncomeWorks.
We are the original developer and sole and only supplier of IncomeWorks. There are no resellers or regional distributors. No other solution calculates the income approach of commercial property via user selected rankings and market based data in a database and then compares the income value to the cost-based value, and if there is a discrepancy, helps the user ascertain why.
In any arena of business, personnel changes have the potential to disrupt a smoothly running office. Assessment personnel can change with every election and large corporations change personnel too; remaining staff must become acclimated to new management, or current management must deal with training a new staff. IncomeWorks is so easy to use that it can actually help bridge the gap between outgoing and incoming staff, and it can be used by clerks and trainees to red flag or crosscheck property evaluations for management, under any office scenario.