Property Valuation
In the income approach, the capitalization rate for a Maine commercial property is calculated as:
ANOI divided by value✓ Correct
BValue divided by NOI
CGross income divided by expenses
DNOI minus debt service
Explanation
Cap rate = NOI ÷ Value. Conversely, Value = NOI ÷ Cap rate. The cap rate represents the investor's expected rate of return on the investment.
Related Maine Property Valuation Questions
- A Maine appraiser uses three comparable sales to estimate value. The comparables show adjusted values of $285,000, $292,000, and $288,000. What is the simple average value indication?
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- 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:
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