Real Estate Math
A Hawaii leasehold property has 35 years remaining on the ground lease with annual rent of $12,000/year. How much total ground rent remains?
AA. $360,000
BB. $420,000✓ Correct
CC. $396,000
DD. $252,000
Explanation
Total remaining ground rent = Annual rent × Remaining years = $12,000 × 35 = $420,000. This represents the total future lease payments without adjusting for time value of money.
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Key Terms to Know
Amortization
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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