Property Valuation
In the income approach, 'potential gross income' (PGI) represents:
AA. Actual rents collected during the year
BB. The maximum income a property would generate if fully occupied at market rents✓ Correct
CC. Income after deducting vacancy and expenses
DD. The income needed to achieve the target cap rate
Explanation
Potential Gross Income is the maximum possible income assuming 100% occupancy at market rents. It represents the theoretical ceiling for income before adjustments for vacancy and collection loss.
Related Georgia Property Valuation Questions
- Paired sales analysis is used in appraisal to:
- Which appraisal approach is typically given the MOST weight when appraising a single-family owner-occupied home in Georgia?
- The gross income multiplier (GIM) for annual rents is calculated as:
- A Comparative Market Analysis (CMA) is prepared by a real estate agent primarily to help a seller determine:
- Effective age in appraisal refers to:
- In real estate appraisal, 'highest and best use' must satisfy which criteria?
- In a seller's market, cap rates for investment properties tend to:
- The income multiplier method uses which of the following to estimate value?
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