Property Valuation
The capitalization rate for a Maine investment property can be described as:
AThe interest rate on the mortgage
BThe ratio of net operating income to property value✓ Correct
CThe percentage of gross rent that is profit
DThe property tax rate applied to assessed value
Explanation
The capitalization rate (cap rate) is the ratio of a property's net operating income (NOI) to its value: Cap Rate = NOI ÷ Value. It reflects the expected rate of return on an investment property.
Related Maine Property Valuation Questions
- In the income approach, the capitalization rate for a Maine commercial property is calculated as:
- An appraiser in Maine is determining the assessed value of a property. The municipality uses an assessment ratio of 80%. If the market value is $350,000, what is the assessed value?
- 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?
- A Maine appraiser notes that a home's single-car garage has been converted to living space. This modification most likely represents:
- In Maine, a certified residential appraiser may appraise:
- In Maine, when the subject property in an appraisal is superior to a comparable sale in one feature, the adjustment is:
- 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:
- In the cost approach to appraisal, 'depreciation' refers to:
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