Property Valuation
What is 'reversion value' in a Delaware income property DCF analysis?
AThe value returned to the original owner after a lease expires
BThe projected sale price (resale value) of the property at the end of the investor's holding period, one of the cash flows in a DCF analysis✓ Correct
CThe value that reverts to the state when an owner dies intestate
DThe reverting of property value after a period of market decline
Explanation
Reversion value is the estimated sale price of the property at the end of the investor's holding period. In a DCF analysis, this terminal value is discounted back to present value along with projected annual income to determine the property's current value.
Related Delaware Property Valuation Questions
- What is 'fee simple value' versus 'leased fee value' in Delaware property appraisal?
- Functional obsolescence in an appraisal refers to:
- What is 'market value' as defined in appraisal practice?
- In the income approach to value, a lower capitalization rate results in:
- What is the purpose of a 'drive-by appraisal' versus a full appraisal in Delaware?
- When appraising using the sales comparison approach, a positive adjustment to a comparable sale is made when:
- What is the 'income capitalization' approach to valuing a Delaware investment property?
- A Delaware home has an outdated, closed floor plan in a market where open floor plans are preferred. This is an example of:
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →