Property Valuation
The 'effective gross income' (EGI) of a rental property is calculated as:
APotential gross income minus vacancy and credit losses✓ Correct
BNet operating income before depreciation
CTotal rent collected plus all other income
DGross rent minus all operating expenses
Explanation
EGI = Potential Gross Income (maximum rent at full occupancy) minus Vacancy and Credit Losses plus Other Income. It represents the realistic income the property is expected to collect.
Related Massachusetts Property Valuation Questions
- Regression in appraisal holds that the value of a superior property is:
- In Massachusetts, a property's assessed value is meant to reflect:
- An appraiser is valuing a property for mortgage lending purposes. The appraisal report must be completed on a form compliant with:
- In Massachusetts, the 'principle of anticipation' in property valuation holds that:
- In Massachusetts, an appraiser analyzing an investment property with expiring below-market leases would use what approach to capture their impact?
- A Massachusetts property owner disagrees with their property tax assessment. They should first:
- When appraising a historic building in Boston's Back Bay, an appraiser notes that historic preservation restrictions reduce the property's marketability. This is an example of:
- A Massachusetts appraiser identifies a comparable sale that closed 18 months ago. The appraiser should:
Practice More Massachusetts Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Massachusetts Quiz →