Property Valuation
The gross rent multiplier (GRM) in Alabama is calculated as:
ANet operating income ÷ cap rate
BSale price ÷ annual gross rent✓ Correct
CAnnual rent × cap rate
DSale price ÷ net income
Explanation
GRM = Sale Price ÷ Annual Gross Rent. It is a quick estimation tool for income property value. Unlike the income approach, it does not account for operating expenses.
Related Alabama Property Valuation Questions
- In the cost approach, the term 'reproduction cost' means:
- A property purchased for $280,000 with improvements costing $45,000 was sold 2 years later for $370,000. What is the total gain?
- A comparable sale used in an appraisal had a garage that the subject property lacks. The appraiser should:
- The USPAP (Uniform Standards of Professional Appraisal Practice) is:
- An appraisal performed 'retrospectively' (as of a past effective date) is used for:
- The principle of 'progression' in real estate value states that:
- When an appraiser concludes that the cost approach results in a significantly higher value than the sales comparison approach, this may indicate:
- In the sales comparison approach, a comparable property that sold for more than the subject property due to a superior feature would require:
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