Property ValuationIntermediateDelaware Exam
What is the 'gross rent multiplier' (GRM) method used for in Delaware?
ACalculating property taxes
BA quick estimate of property value based on gross rental incomeCorrect
CDetermining commission rates for rental properties
DCalculating depreciation for tax purposes
Why A quick estimate of property value based on gross rental income Is Correct
Answer B: A quick estimate of property value based on gross rental income
The GRM is a quick valuation method for income properties: Value = Gross Rent × GRM. It is less precise than the capitalization approach because it does not account for vacancies or expenses.
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
Key Property Valuation Terms in This Question
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