Property Valuation
Capitalization rate (cap rate) is calculated as:
ANet Operating Income ÷ Property Value✓ Correct
BGross Income × Property Value
CNet Operating Income × Property Value
DGross Income ÷ Vacancy Rate
Explanation
Cap rate = Net Operating Income (NOI) ÷ Property Value. It measures the rate of return on an income-producing property.
Related Alabama Property Valuation Questions
- In an appraisal of an Alabama property, a positive adjustment to a comparable sale means the comparable is:
- When an appraiser states a value 'as of' a certain date, this is called the:
- The assessed value of a property for tax purposes is often:
- An appraiser notes a comparable property sold for $300,000. The comparable has a pool, but the subject does not. The pool is estimated to contribute $15,000 in value. The appraiser should:
- Functional obsolescence due to a feature that costs more to cure than the value it adds to the property is called:
- The gross income multiplier (GIM) differs from the gross rent multiplier (GRM) in that GIM uses:
- Which of the following best describes an arm's length transaction used as a comparable sale?
- A residential property's square footage of gross living area (GLA) is measured:
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