Property Valuation
An appraiser reviewing an income property's 'rent roll' is examining:
AA list of comparable rental sales
BA schedule of all units, their tenants, lease terms, and current rents✓ Correct
CThe property's annual NOI calculation
DThe historical vacancy rates
Explanation
A rent roll lists each tenant, their unit, the current rent being paid, the lease term, and any other relevant lease details. It provides the basis for the income approach's income analysis.
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Key Terms to Know
Net Operating Income (NOI)
The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
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.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Math Concepts
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