Property Valuation
In Arizona, the 'land residual technique' in appraisal is used to:
ADetermine the land value when only the improvement value is known
BSeparate the income attributable to the land from the total property income to estimate land value✓ Correct
CAllocate land costs for tax purposes
DCalculate property tax based on land value alone
Explanation
The land residual technique estimates land value by subtracting the income attributable to the improvements (based on their cost and appropriate return rate) from the total property income, with the residual income capitalized to indicate land value.
Related Arizona Property Valuation Questions
- An Arizona property produces a Net Operating Income (NOI) of $120,000 per year. Using a capitalization rate of 6%, what is the estimated value?
- The sales comparison approach to value is MOST appropriate for:
- The sales comparison approach to value is MOST appropriate for appraising:
- In Arizona, a Comparative Market Analysis (CMA) prepared by a real estate agent is:
- In the income approach, a property generates $36,000 annual net operating income (NOI). If the capitalization rate is 6%, what is the estimated value?
- In the income approach, 'effective gross income' (EGI) is calculated as:
- The cost approach to value is MOST appropriate for:
- In Arizona, an appraisal that is completed 'retrospectively' (for a date in the past) is called:
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