Property Management
The capitalization of income approach to valuing a property for sale by an owner is best described as which of the following?
ADivide the asking price by gross rent to get the GRM
BDivide the NOI by the desired cap rate to determine value✓ Correct
CMultiply the number of units by average rent and divide by 12
DAdd replacement cost and land value
Explanation
Value = NOI ÷ Cap Rate. This is the income capitalization approach.
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