Property Valuation
Which Iowa property type would most likely be appraised using the income approach?
ASingle-family home in Iowa City
BVacant agricultural land in Story County
CA 20-unit apartment complex in Cedar Rapids✓ Correct
DA church building in Sioux City
Explanation
The income approach is most appropriate for income-producing properties like apartment complexes. It capitalizes the property's net operating income to estimate value.
People Also Study
Related Iowa Questions
- An appraiser uses the income capitalization approach to value a 10-unit apartment building with a gross annual income of $120,000, vacancy and collection loss of 5%, and operating expenses of $50,000. The cap rate is 7%. What is the estimated value?Property Valuation
- The income approach to value is MOST appropriate for which type of property?Property Valuation
- Iowa agricultural land is often valued using a capitalized income approach. If a 160-acre farm generates $240 cash rent per acre and the cap rate is 4%, what is the indicated value?Property Valuation
- The income capitalization approach divides NOI by the cap rate to find value. If a Des Moines apartment has an NOI of $85,000 and comparable properties sell at a 7% cap rate, what is the value?Property Valuation
- An Iowa apartment building produces monthly gross rents of $8,400. Operating expenses run 35% of gross income. The cap rate for this type of property is 7%. What is the estimated value?Real Estate Math
- An Iowa property has a net operating income of $24,000 and a cap rate of 8%. What is the estimated value?Real Estate Math
- An investment property in Iowa has a net operating income of $22,500 and was purchased for $375,000. What is the capitalization rate?Real Estate Math
- A 6-unit apartment building in Iowa has each unit renting for $750/month. What is the annual gross potential income?Real Estate Math
Key Terms to Know
Capitalization Rate (Cap Rate)
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Math Concepts
Study This Topic
Practice More Iowa Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Iowa Quiz →