Property Valuation (alternative)
The direct capitalization method used by Maryland appraisers estimates value by:
AMultiplying future projected income by a discount rate
BDividing a single year's NOI by a market-derived capitalization rate✓ Correct
CAdding annual NOI to the building's cost
DMultiplying NOI by the number of years owned
Explanation
Direct capitalization: Value = NOI ÷ Cap Rate. It uses a single representative year's income and a market-derived rate, making it straightforward for income-producing property valuation.
Related Maryland Property Valuation (alternative) Questions
- A Maryland appraiser who completes a 'desktop' appraisal uses:
- The highest and best use in Maryland appraisal is defined as the use that is:
- In Maryland, an appraiser's estimate of value is called a(n):
- Functional obsolescence in a Maryland home appraisal refers to:
- An adjustment for a superior feature in a comparable sale when using the sales comparison approach means the appraiser will:
- When appraising a single-family home in Maryland, the most commonly used approach is:
- In Maryland, the 'economic rent' of a property refers to:
- Reproduction cost in Maryland appraisal is the cost to build:
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