Property Valuation
When valuing an income property, the overall capitalization rate (OAR) is derived from:
AThe subject property's historical income divided by its cost
BMarket data — the NOI of comparable sales divided by their sale prices✓ Correct
CThe lender's required mortgage constant
DThe property's expected appreciation rate
Explanation
The overall (direct) capitalization rate is extracted from market data by dividing the NOI of comparable sold properties by their sale prices. This market-derived rate reflects investors' expectations and risk perceptions for that type of property in that market.
Related Alaska Property Valuation Questions
- An Alaska property's reproduction cost is:
- The appraisal approach most commonly used to value single-family residential properties in Alaska is the:
- In Alaska, the cost approach to value is MOST useful when appraising:
- In Alaska, a 'desk review' of an appraisal is typically requested by lenders to:
- The principle of contribution in real estate valuation states that:
- The 'gross living area' (GLA) used in Alaska residential appraisals typically includes:
- The principle of substitution underpins which appraisal approach?
- In Alaska, which of the following would NOT be considered a 'component' of the cost approach value estimate?
Practice More Alaska Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alaska Quiz →