First, we need to understand what constitutes real estate—villas, apartments, land, and so on.
I am sure there are many online discussions regarding this topic.
The point I want to make is that we need to look at the rent—specifically, the rent in this residential complex.
We need to see what the rent is for similar properties nearby, because that rent determines the property’s price.
Why does rent determine a property’s price? If you rent a property for $10,000 a year, it implies the property is not worth $1 million.
If you have $1 million, it would generate $20,000 in annual interest; you wouldn’t use that money to buy such a house.
This is because cash flow is the most powerful factor.