Property Valuation
In Alaska, the 'capitalization rate' is affected primarily by:
AThe age and condition of the building only
BMarket risk, investment alternatives, property type, location, and income stability✓ Correct
CThe mortgage interest rate on the property
DThe assessed value for property tax purposes
Explanation
Capitalization rates are market-derived and reflect investors' required return for a given property type and risk level. Higher-risk properties (older, less stable income, lower-quality locations) command higher cap rates (lower values). Cap rates are influenced by alternative investment returns, financing costs, and market conditions.
Related Alaska Property Valuation Questions
- Under USPAP, an Alaska appraiser who has a financial interest in a property they are appraising must:
- External obsolescence affecting a property's value is caused by:
- The principle of 'highest and best use' in Alaska appraisal means:
- Depreciation in real estate appraisal is best defined as:
- 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:
- Under the Uniform Standards of Professional Appraisal Practice (USPAP), an appraiser who knowingly provides a false appraisal has committed:
- The principle of highest and best use in Alaska appraisal requires that the use be:
- In Alaska, the valuation of a 'partial interest' (such as a fractional ownership or minority interest) typically results in a value that is:
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