Property Valuation
In the income approach, a Maryland appraiser deducts which of the following to arrive at NOI?
ADebt service (mortgage payments)
BAll operating expenses excluding debt service and income taxes✓ Correct
CDepreciation from the cost approach
DCapital expenditure reserves only
Explanation
Net Operating Income = Effective Gross Income – All Operating Expenses (management fees, taxes, insurance, maintenance, utilities). Debt service and income taxes are excluded from NOI.
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