Your president bought two acres of land for $200,000 ten years ago. Although it is zoned for commercial use, it currently houses eight small, single-family houses. A property management fir that wants to continue leasing the eight houses has offered you $400,000 for the property. A developer wants to build a 12-story apartment building on the site and has offered $600,000. What value should you assign to the property?

Not sure how to go about this do I need to figure out output of the two different properties?

Your president bought two acres of land for $200,000 ten years ago.

Although it is zoned for commercial use, it currently houses eight
small, single-family houses. A property management firm that wants
to continue leasing the eight houses has offered you $400,000 for the
property. A developer wants to build a 12-story apartment building on
the site and has offered $600,000. What value should you assign to
the property?

To determine the value of the property, we need to consider the potential income from the property management firm and the potential profit from the developer.

First, let's calculate the income from the property management firm. They have offered $400,000 for the property, and their intention is to continue leasing the eight houses. We need to determine the potential rental income from these houses.

To calculate the rental income, you might need to research the average rental rates for similar single-family houses in the area. Multiply that rate by the number of houses (8) and the average number of months a house is occupied per year. This will give you the annual rental income.

Next, let's calculate the potential profit from the developer. They have offered $600,000 for the property, intending to build a 12-story apartment building. Research the market value of similar apartment buildings in the area to estimate the potential profit that could be generated from the development.

Once you have the estimated rental income and potential profit from the developer, compare them to the purchase price of $200,000 ten years ago. You can assign a value to the property by considering the potential income or profit it could generate, and how it compares to the initial purchase price.

It's important to note that this analysis does not take into account potential costs such as property management fees, maintenance expenses, taxes, or other factors that may affect the value of the property. Therefore, it's advisable to consult with a real estate professional or use additional financial analysis methods to get a more accurate valuation.