Property Valuation
An appraiser in eastern Kentucky is valuing a property that sits above an active coal mine. The most significant value concern is:
AAesthetic views of the mine equipment
BRisk of surface subsidence, structural damage, and liability related to mining operations✓ Correct
CThe noise from mining trucks
DThe increased tax burden from mineral rights
Explanation
Properties above active coal mines face significant risk of surface subsidence (ground sinking), structural damage, and potential liability issues, all of which materially affect market value.
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Key Terms to Know
Net Operating Income (NOI)
The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Math Concepts
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