Property Valuation
In the income approach, potential gross income (PGI) is best described as:
AIncome after deducting vacancy and operating expenses
BThe total income a property would generate if 100% occupied at market rents✓ Correct
CActual collected rents
DNet operating income before debt service
Explanation
Potential Gross Income (PGI) is the theoretical maximum income a property could generate if fully occupied at market rents, before any deductions.
Related Maryland Property Valuation Questions
- A property generates a net operating income (NOI) of $45,000. The market capitalization rate is 6%. What is the estimated value?
- The income multiplier approach to valuing Maryland residential rentals typically uses a:
- A Maryland appraiser preparing a restricted appraisal report versus a full appraisal report provides:
- The sales comparison approach is most reliable when there are:
- An appraiser's estimate of value for a Maryland property found under the income approach is $600,000 and under the sales comparison approach is $620,000. In reconciliation for a residential property, the appraiser would most likely:
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