Property Valuation
In Louisiana, 'market rent' in an income approach analysis differs from 'contract rent' in that market rent is:
AAlways lower than contract rent
BThe rent the property could command in the open market at the time of the appraisal, which may be higher or lower than the current lease (contract) rent✓ Correct
CThe rent specified in the existing lease agreement
DThe rent assessed by the parish assessor
Explanation
Market rent is what a property could reasonably achieve in the open market — what a new tenant would pay. Contract rent is what the current tenant actually pays under their lease. The difference between market and contract rent (over/under rent) affects the property's investment value versus its market value.
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