Real Estate Math
If a property earns $2,200 per month in rent and comparable properties have a GRM of 150, what is the estimated property value?
A$264,000
B$330,000✓ Correct
C$198,000
D$396,000
Explanation
Value = Monthly rent × GRM = $2,200 × 150 = $330,000. Using the values given ($2,200), apply the appropriate formula..
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Key Terms to Know
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.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Math Concepts
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