Property Valuation
In Hawaii, the 'income multiplier' method for valuing a small rental property divides the property value by:
AA. The cap rate
BB. Annual or monthly gross income to produce the gross income multiplier✓ Correct
CC. The operating expense ratio
DD. The number of units in the building
Explanation
The gross income multiplier (GIM or GRM) is calculated by dividing the sales price by the gross annual or monthly income, providing a quick value indicator.
Related Hawaii Property Valuation Questions
- In Hawaii, which factor most significantly affects the difference in value between leasehold and fee simple properties?
- In Hawaii, a property with a ground lease has a 'leased fee interest.' This is:
- What is 'regression' and 'progression' in real estate value theory?
- In Hawaii, an appraiser uses a 5% cap rate for a residential rental property and a 7% cap rate for a commercial property. This reflects that:
- In Hawaii, an appraiser determines that comparables need time adjustments because the market has been appreciating at 5% annually. A sale from 12 months ago would be adjusted by:
- Which type of depreciation is considered incurable and arises from factors outside the property's boundaries?
- What is 'fee simple value versus leasehold value' comparison in Hawaii and why is leasehold typically discounted?
- What is capitalization rate (cap rate) used for in Hawaii real estate appraisal?
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