Property Valuation
A Connecticut property has a GRM of 140 based on comparable sales. The subject property rents for $2,800 per month. What is the estimated value?
A$280,000
B$336,000
C$392,000✓ Correct
D$470,400
Explanation
Value = GRM × Gross Monthly Rent = 140 × $2,800 = $392,000. Using the values given ($2,800), apply the appropriate formula..
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Key Terms to Know
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.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Math Concepts
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