An Alaska waterfront cabin depreciates because a nearby factory was built after the cabin was constructed. This is an example of:
Why External obsolescence Is Correct
Answer C: External obsolescence
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
People Also Study
Related Alaska Questions
- External (economic) obsolescence affecting Alaska property values might be caused by:Property Valuation
- Obsolescence caused by a zoning change that allows an incompatible use adjacent to a residential property in Alaska is an example of:Property Valuation
- A landowner in Alaska builds a cabin on what they believe is their property, but the cabin encroaches 3 feet onto the neighbor's land. The cabin is most likely classified as:Property Ownership
- External obsolescence affecting a property's value is caused by:Property Valuation
- A property owner in Alaska petitions to have their land rezoned from residential to commercial. This process is called:Land Use & Zoning
- Permafrost considerations in Alaska often affect building codes and land use in that construction on unstable permafrost may require:Land Use & Zoning
- In Alaska, functional obsolescence in a property could be caused by:Property Valuation
- Which of the following is an example of police power as applied in Alaska land use regulation?Land Use & Zoning
Key Terms to Know
A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Study This Topic
Practice More Alaska Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Alaska Quiz →