Property Valuation
A Maine appraiser uses the 'gross rent multiplier' (GRM) method. A property rents for $1,200/month and comparable sales suggest a GRM of 130. The estimated value is:
A$130,000
B$144,000
C$156,000✓ Correct
D$164,000
Explanation
Annual rent = $1,200 × 12 = $14,400. Value = GRM × Annual Rent = 130 × $14,400?
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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.
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.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Math Concepts
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