When calculating the resale value, what must be done first according to ARGUS methodology?

In the ARGUS methodology, calculating the resale value of a property starts with determining the net operating income (NOI) divided by the capitalization rate (Cap Rate). This step is crucial because it establishes the property's value based on its income-generating potential. The NOI reflects the income available to an investor after all operating expenses are deducted, while the Cap Rate is a critical metric used to evaluate investment performance. By taking the NOI and dividing it by the Cap Rate, you derive the property's estimated value to a potential buyer, providing a foundation for further calculations related to resale.

Once this value is established, other factors, such as selling price estimation, selling costs, and market trends, can then be appropriately integrated into the overall analysis. This methodology ensures a systematic approach to assessing property value, focusing initially on its financial performance before considering external selling conditions.