Property Valuation
Under the income approach, 'potential gross income' (PGI) is the total rental income the property would generate if:
AAll units were vacant
B100% occupied at current market rents✓ Correct
COccupied at historical average occupancy rates
DAll units rented at below-market affordable housing rates
Explanation
Potential gross income (PGI) is the total rental income a fully occupied property would generate at current market rents. From PGI, the appraiser deducts a vacancy and credit loss allowance to arrive at effective gross income (EGI).
Related Alaska Property Valuation Questions
- The income approach to value is MOST appropriate for valuing which Alaska property type?
- An appraiser uses an income multiplier of 9.5 for a property with annual gross income of $48,000. The indicated value is:
- Which principle of value explains why a home across from a noisy industrial facility will sell for less than an identical home in a quiet residential area?
- In Alaska, the appraisal concept of 'market exposure time' is relevant because it:
- In Alaska, a property that has been vacant for an extended period typically experiences which type of depreciation that affects its market value?
- An Alaska appraiser notes that several properties in a neighborhood sold at significant discounts because of a nearby industrial odor. This is an example of value lost to:
- A Fairbanks property's estimated remaining economic life is 35 years. The building is 15 years old with an original economic life of 50 years. The effective age is:
- An Alaska property has a gross potential income of $96,000. After deducting a 5% vacancy allowance and $32,000 in operating expenses, the NOI is:
Practice More Alaska Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alaska Quiz →