Property Valuation
A property's Gross Rent Multiplier (GRM) is calculated by dividing the:
ANet operating income by the capitalization rate
BSale price by the gross monthly rent✓ Correct
CSale price by the net annual income
DGross annual income by the vacancy rate
Explanation
GRM = Sale Price ÷ Gross Monthly Rent. It is a quick, simplified tool used to compare income-producing properties, though it does not account for expenses.
Related Arkansas Property Valuation Questions
- Reconciliation in appraisal refers to:
- When a comparable sale was a foreclosure or distressed sale, the appraiser should:
- An appraiser makes a positive adjustment to a comparable sale when the comparable:
- An income property has an NOI of $50,000 and the market cap rate is 7.5%. What is the estimated value?
- Physical deterioration that can be corrected at a cost that is less than the resulting increase in value is called:
- Market value is defined as:
- Which of the following properties would MOST benefit from the cost approach in appraisal?
- The principle of ANTICIPATION in appraisal states that:
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