Property ValuationIntermediateDelaware Exam
In the income approach, what does a lower capitalization rate indicate about a Delaware investment property?
AHigher risk and lower value
BLower risk and higher valueCorrect
CHigher risk and higher value
DLower risk and lower value
Why Lower risk and higher value Is Correct
Answer B: Lower risk and higher value
Cap rates and value move inversely. A lower cap rate reflects lower perceived risk (e.
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.
Related Delaware Property Valuation Questions
- A Delaware property is assessed at $180,000 with an assessment ratio of 60% of market value. What is the estimated market value?Property Valuation
- A property appraised using the sales comparison approach has three comparables. The appraiser adjusts each comparable. The final step is to:Property Valuation
- What does 'DUST' stand for in real estate value theory?Property Valuation
- What is 'plottage' in real estate valuation?Property Valuation
- In Delaware appraisal practice, what is 'highest and best use'?Property Valuation
- What is an 'appraisal management company' (AMC) and its role in Delaware real estate transactions?Property Valuation
- The sales comparison approach to value is most appropriate for:Property Valuation
- In the income approach, before applying the cap rate, the appraiser must estimate:Property Valuation
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →