Cando valuation and CAP Rates
I am evaluating an investment in Cando on monthly and daily rentals for holding period of 10 years.
The property is located in a affluent location of Rio de Janerio, Brazil.
My NOI for monthly rentals comes to 300USD and 500USD for daily rentals escalating by 3% per annum. Thecap rate is 6%
Since monthly NOI for daily rentals is 66% above than monthly rentals - my sales value in the terminal year has no match to the sales value for the monthly rentals.
It is making no sense to have a different sales value for the same property only due to changes in the rental model.
I would like to have 5%-10% overall valuation difference. I have already taken a low occupancy of 55% for daily rentals but my sales value in the terminal year is still way off.
Can any one suggest quick fixes to that? Is it a good adjust cap?