Property Valuation
A Massachusetts vacation property near Cape Cod is most influenced by which factor in its valuation?
AProximity to industrial facilities
BLocation, waterfront access or proximity, and seasonal rental potential✓ Correct
CDistance from Boston
DThe property tax rate only
Explanation
Cape Cod vacation properties are primarily valued based on location (waterfront or proximity to water), views, recreational access, and seasonal rental income potential. These are the dominant value drivers.
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Key Terms to Know
Gross Rent Multiplier (GRM)
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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