Property Valuation
In Alaska, a property's 'insurable value' differs from its 'market value' because insurable value:
AIncludes the land value
BIs based on the cost to rebuild the improvements without land value✓ Correct
CIs always higher than market value
DIs determined by the property tax assessor
Explanation
Insurable value is the cost to rebuild or reproduce the improvements (excluding land). Since land cannot be destroyed by fire, flood, or similar perils, insurance policies cover only the structures. Market value includes both land and improvements.
Related Alaska Property Valuation Questions
- Which of the following is TRUE about the principle of conformity in real estate appraisal?
- In the sales comparison approach, an appraiser adjusts the comparable sale price when:
- An Alaska commercial property has a net operating income of $60,000 per year. Using a 6% cap rate, the estimated value is:
- External obsolescence in a property appraisal refers to depreciation caused by:
- The principle of substitution underpins which appraisal approach?
- Reconciliation in the appraisal process means:
- An Alaska appraiser is estimating the value of a 20-unit apartment complex. The appraiser determines the NOI is $95,000 and selects a cap rate of 7%. The indicated value by the income approach is:
- The capitalization rate (cap rate) is calculated as:
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