Property Valuation
The 'gross rent multiplier' (GRM) method is best used for:
ALarge commercial properties with complex leases
BQuick, rough estimates of small residential income properties✓ Correct
CVacant land valuation
DNew construction cost estimates
Explanation
The GRM method is a quick, simple valuation tool that divides the sales price by the gross annual (or monthly) rent. It is commonly used for small residential income properties like single-family rentals and small multifamily units.
Related Florida Property Valuation Questions
- If a property has a net operating income (NOI) of $45,000 and the capitalization rate is 7.5%, what is the estimated value?
- An 'absentee owner' discount in property valuation refers to:
- Under Florida's Save Our Homes (SOH) cap, a homesteaded property's assessed value can increase no more than:
- Which principle states that when two properties are similar, the value of the more expensive property is affected negatively by its proximity to the less expensive property?
- A Florida neighborhood is experiencing 'filtering' in the housing market. This means:
- An appraiser is valuing a Florida duplex using the income approach. The property has a gross income of $36,000 and operating expenses of $12,000. Using a 7.5% cap rate, what is the indicated value?
- A Florida appraiser notes that a neighborhood is transitioning from residential to commercial use along a major arterial road. This transition affects appraisals in the area by:
- In Florida, an appraisal performed for a federally related transaction must be conducted by a:
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