What is 'economic rent' and how does it compare to 'contract rent' in a Delaware lease?
Why Economic (market) rent is what the property could command today Is Correct
Answer B: Economic (market) rent is what the property could command today
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
People Also Study
Related Delaware Questions
- What is 'market rent' versus 'contract rent' in a Delaware lease analysis?Property Valuation
- A Delaware property's current market value is $410,000, with a 25-year-old building on 60-year economic life land valued at $90,000. What is the depreciated value of improvements using the age-life method?Real Estate Math
- An appraisal is an opinion of value that must be prepared by:Property Valuation
- What is 'fee simple value' versus 'leased fee value' in Delaware property appraisal?Property Valuation
- A Delaware tenant signs a 5-year NNN lease for a 3,200 sq ft retail space at $28/sq ft/year with 3% annual rent increases. What is the rent in Year 2?Real Estate Math
- A Delaware property has a market value of $425,000. If it is assessed at 65% of market value and the mill rate is 18 mills, what is the annual property tax?Real Estate Math
- A Delaware property has an annual NOI of $42,500. Using a cap rate of 6.5%, what is the estimated market value?Real Estate Math
- Rent concessions offered to attract tenants in a competitive market may include:Property Management
Key Terms to Know
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Fee SimpleThe highest and most complete form of property ownership — absolute ownership with the right to use, sell, or pass the property to heirs.
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.
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 →