Property Valuation
In Arizona, the income approach to value is LEAST applicable for:
AApartment buildings
BOwner-occupied single-family homes in suburban neighborhoods✓ Correct
CShopping centers
DOffice buildings
Explanation
The income approach is least applicable to owner-occupied single-family homes because they are not typically purchased for income generation. The sales comparison approach is most appropriate for residential properties.
People Also Study
Related Arizona Questions
- The appraisal approach most commonly used to estimate the value of single-family residential properties in Arizona is the:Property Valuation
- The sales comparison approach to value is MOST appropriate for:Property Valuation
- An Arizona residential appraiser uses the sales comparison approach and finds the subject property has a pool that no comparable sale has. The appraiser should:Property Valuation
- The sales comparison approach to value is MOST appropriate for appraising:Property Valuation
- An Arizona property has a potential gross income of $108,000, a 6% vacancy rate, and $36,000 in operating expenses. If properties in the area sell at a 7.5% cap rate, what is the estimated value?Real Estate Math
- An apartment property has a gross scheduled income of $150,000, a 6% vacancy, and expenses of $55,000. If similar properties sell at a 7% cap rate and a 10x EGIM, what does the income approach indicate as value?Real Estate Math
- An Arizona rental property generates $2,400 per month in rent. The gross rent multiplier (GRM) for comparable properties is 135. What is the estimated value?Real Estate Math
- A property's net operating income (NOI) is $48,000 and the cap rate is 8%. What is the estimated property value using the income approach?Real Estate Math
Key Terms to Know
Capitalization Rate (Cap Rate)
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Study This Topic
Practice More Arizona Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Arizona Quiz →