Property Valuation (alternative)
In the income approach to appraisal, 'effective gross income' is calculated as:
APotential gross income minus vacancy and credit losses✓ Correct
BNet operating income plus debt service
CGross rent times 12 months
DNOI divided by the cap rate (alternative)
Explanation
Effective gross income = Potential gross income − Vacancy and credit losses. It represents the income the property actually collects after accounting for vacancies.
Related Maryland Property Valuation (alternative) Questions
- In Maryland appraisal practice, the 'date of value' is significant because:
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