Property Valuation
What is 'market rent' vs. 'contract rent' in income property appraisal?
AMarket rent and contract rent are always equal
BMarket rent is the prevailing rental rate in the market; contract rent is the actual rent being paid under the current lease, which may differ from market✓ Correct
CMarket rent is set by the government; contract rent is negotiated
DContract rent is always higher than market rent
Explanation
Market rent is the rental income a property would command in the open market at current conditions. Contract rent is the actual rent being paid under the existing lease.
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