Property Valuation
The 'gross rent multiplier' (GRM) method for quick valuation of a rental property uses:
ANet operating income divided by the property value
BThe property's sale price divided by its gross monthly (or annual) rent to establish a multiplier used to estimate value✓ Correct
CAnnual expenses divided by gross income
DThe capitalization rate multiplied by the property value
Explanation
GRM = Sale Price ÷ Gross Rent. To estimate value: Value = GRM × Gross Rent.
Related Arizona Property Valuation Questions
- Depreciation in real estate appraisal refers to:
- Contribution in appraisal means that the value of any component is measured by:
- In the sales comparison approach, if a comparable property sold for $320,000 and has a pool worth $15,000 that the subject property lacks, the appraiser should:
- A Comparative Market Analysis (CMA) in Arizona is prepared by a real estate agent and is:
- In the income approach to value, the capitalization rate is calculated as:
- Functional obsolescence in real estate refers to a loss in value due to:
- The cost approach to value starts with:
- In the sales comparison approach, an appraiser makes 'adjustments' to comparable sales. If a comparable sale has a pool and the subject property does NOT, the appraiser would:
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