An investment property produces a monthly gross income of $3,800. Using a GRM of 110, what is the estimated value?
Why $418,000 Is Correct
Answer A: $418,000
Exam Tip: Real Estate Math
Math questions are formula-based. Memorize the key formulas: commission splits, proration, cap rate (NOI ÷ Value), GRM (Price ÷ Gross Rent), and LTV (Loan ÷ Value). Practice converting between annual and monthly figures.
People Also Study
Related Delaware Questions
- In a Delaware real estate transaction, transfer tax is paid to:Escrow & Title
- A Delaware property generates $4,200 monthly gross rental income. Using a GRM of 115 (monthly), what is the estimated value?Real Estate Math
- Using the income approach, if a property has a NOI of $45,000 and the cap rate is 7.5%, what is the estimated value?Property Valuation
- A property has a net operating income of $48,000 per year. Using a capitalization rate of 8%, what is the estimated value?Real Estate Math
- A property has a gross rent multiplier of 120 and rents for $1,800 per month. What is the estimated value?Real Estate Math
- External (economic) obsolescence affecting a Delaware property could be caused by:Property Valuation
- A mortgage 'point' equals:Finance
- A property's land-to-building value ratio is important in the cost approach because:Property Valuation
Key Terms to Know
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Math Concepts
Study This Topic
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →