In Alaska, which of the following would NOT be considered a 'component' of the cost approach value estimate?
Why Gross rent multiplier Is Correct
Answer D: Gross rent multiplier
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.
Key Property Valuation Terms in This Question
People Also Study
Related Alaska Questions
- An appraiser uses the cost approach for a property and estimates reproduction cost new at $380,000, land value at $75,000, and total depreciation at $55,000. What is the estimated value?Property Valuation
- An appraiser in Alaska uses the sales comparison approach and finds three comparable sales. After adjustments, the adjusted values are $310,000, $315,000, and $312,000. The most likely estimate of value using reconciliation would be:Property Valuation
- What does the Gross Rent Multiplier (GRM) method of valuation use to estimate property value?Property Valuation
- A building in Alaska has a replacement cost of $800,000. It is 25 years old with a 50-year economic life. Using straight-line depreciation, what is the depreciated value?Real Estate Math
- An Alaska appraiser using the cost approach calculates the following: land value $150,000, replacement cost new of improvements $400,000, total depreciation $80,000. The indicated value is:Property Valuation
- An Alaska property generates monthly rent of $3,200. The owner's gross rent multiplier for the area is 130. What is the estimated market value?Real Estate Math
- An Alaska property rents for $2,500 per month. The property sold for $375,000. What is the Gross Rent Multiplier (GRM)?Real Estate Math
- An Alaska commercial lease requires a base rent of $24,000 per year plus a percentage rent of 4% of gross sales over $300,000. If the tenant's gross sales are $600,000, what is the total annual rent?Real Estate Math
Key Terms to Know
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Math Concepts
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 →