Property Valuation
A Maine appraiser making an income approach to value uses a 'vacancy and collection loss' factor to:
AEstimate the cost of repairs
BAccount for the realistic reduction in potential income due to vacancies and uncollected rents✓ Correct
CCalculate the cap rate
DDetermine the depreciation of the building
Explanation
Vacancy and collection loss (V&CL) is deducted from potential gross income (PGI) to arrive at effective gross income (EGI), reflecting the realistic expectation that not all units will be occupied and not all rents will be collected.
Related Maine Property Valuation Questions
- A Maine appraiser is valuing a lakefront home. The home is 30 years old with a physical life of 60 years. Using age-life depreciation, the physical depreciation percentage is:
- In Maine, an 'arm's length transaction' is one where:
- A Maine appraiser is asked to determine the 'as improved' vs. the 'as if vacant' value. This distinction is important for:
- When a Maine appraiser makes final reconciliation, they are:
- A Maine appraisal uses the income capitalization approach. A property generates $36,000 net operating income annually. Using a 6% cap rate, the indicated value is:
- The net operating income (NOI) of a property is calculated as:
- A Maine appraiser uses a paired sales analysis to determine that a garage adds $18,000 to property value. This technique is used in the:
- A Maine appraiser uses the cost approach on a 15-year-old home. Physical depreciation based on straight-line over a 50-year economic life is:
Practice More Maine Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Maine Quiz →