Property Valuation
In Michigan, a 'stabilized occupancy' assumption in an income appraisal means the appraiser:
AUses the current actual occupancy rate regardless of market norms
BUses a typical market vacancy rate rather than current temporary conditions (high vacancy or 100% occupancy) to normalize the income estimate✓ Correct
CAssumes the property is always 100% occupied
DUses only historical vacancy data from the prior 10 years
Explanation
Stabilized occupancy is the typical long-term occupancy rate a property would achieve in the normal market (minus market vacancy), which may differ from temporary current conditions. Using stabilized figures produces a more reliable value indication.
People Also Study
Related Michigan Questions
- A Michigan commercial property has a net operating income of $90,000. Using a cap rate of 7.5%, what is the estimated value?Property Valuation
- A Michigan appraiser applies the income approach to a 12-unit apartment building. Net operating income is $96,000 and the cap rate is 8%. The indicated value is:Property Valuation
- A property generates a net operating income (NOI) of $45,000 annually. Using a capitalization rate of 7.5%, what is the estimated value?Property Valuation
- In Michigan, 'market value' as used in appraisal is defined as:Property Valuation
- A Michigan property's net operating income is $54,000 and the cap rate is 9%. What is the estimated value?Real Estate Math
- A Michigan property's value is $425,000 and it is assessed at 50% of market value. The tax rate is 45 mills. What is the annual property tax?Real Estate Math
- A Michigan rental property has a vacancy rate of 8% and potential gross income of $60,000/year. What is the effective gross income?Real Estate Math
- A Michigan property's market value is $220,000. The SEV is 50% of market value. With a 35-mill tax rate applied to the SEV, what are the annual property taxes?Real Estate Math
Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Study This Topic
Practice More Michigan Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Michigan Quiz →