Property Valuation
In Massachusetts, the gross rent multiplier (GRM) is calculated as:
ASale Price ÷ Annual Operating Expenses
BSale Price ÷ Gross Annual Rental Income✓ Correct
CNet Operating Income ÷ Capitalization Rate
DMonthly Rent × Number of Units
Explanation
GRM = Sale Price ÷ Gross Annual Rental Income (or GRM = Sale Price ÷ Monthly Rent for monthly GRM). It provides a quick estimate of value but does not account for operating expenses.
Related Massachusetts Property Valuation Questions
- A Massachusetts appraiser identifies 'functional obsolescence' in a 4-bedroom home that has only one bathroom. This is an example of:
- The 'effective gross income' (EGI) of a rental property is calculated as:
- A Massachusetts property is worth $500,000 and the land is valued at $100,000. The building is 15 years old with a 50-year economic life. What is the depreciation percentage?
- A Massachusetts rental property has a gross monthly rent of $4,500 and recently sold properties show a monthly GRM of 150. What is the indicated value?
- In the sales comparison approach, when a comparable sale has a feature the subject property LACKS, the appraiser:
- An appraiser finds that a comparable home sold for $420,000. It has a garage worth $15,000 that the subject property lacks, and the comparable's lot is $10,000 smaller than the subject's. What is the adjusted sale price?
- In Massachusetts, the 'highest and best use' of a property is defined as the use that is:
- When appraising a Boston condominium, an appraiser would most commonly use:
Practice More Massachusetts Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Massachusetts Quiz →