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Real Estate Math

Area Calculation (Square Footage)

Area calculation involves determining the square footage or acreage of a property using geometric formulas. Key conversions: 1 acre = 43,560 square feet, 1 mile = 5,280 feet, 1 section = 640 acres.

Understanding Area Calculation (Square Footage)

Common formulas: rectangles (Length x Width), triangles (1/2 x Base x Height), circles (pi x Radius²). For irregular shapes, divide into regular shapes and add them up. Land conversions are frequently tested: 1 acre = 43,560 sq ft, 1 section = 640 acres = 1 square mile, 1 township = 36 sections.

Real-World Example

A rectangular lot measures 150 feet by 200 feet. Area = 150 x 200 = 30,000 square feet. To convert to acres: 30,000 / 43,560 = 0.689 acres. If land sells for $5/sq ft, lot value = 30,000 x $5 = $150,000.

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Exam Tips

Memorize that 1 acre = 43,560 square feet and 1 section = 640 acres. For irregular lots, practice breaking them into rectangles and triangles. Always double-check your units—don't mix feet and inches or square feet and acres in the same calculation.

Related Terms

Transfer Tax CalculationProration CalculationsLoan Qualification Math

Related Concepts

Converting a percentage to a decimal involves dividing the percentage value by 100.

IRV stands for Income, Rate, and Value. It represents the relationship between Net Operating Income (I), Capitalization Rate (R), and Property Value (V).

Net Operating Income (NOI) is the revenue a property generates after deducting all operating expenses.

The gross rent multiplier (GRM) is a quick method for estimating the value of income-producing property by multiplying the property's gross rent by a factor derived from comparable sales. GRM = Sale Price / Gross Rent.

The capitalization rate (cap rate) is the ratio of a property's net operating income to its sale price, expressed as a percentage. It is used to estimate value and compare profitability of investment properties. Cap Rate = NOI / Value.

Frequently Asked Questions

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