Property Valuation
A Minnesota appraiser is valuing a special-purpose property (church building). Which appraisal approach is typically most applicable?
ASales comparison approach only
BIncome approach only
CCost approach✓ Correct
DGross rent multiplier method
Explanation
The cost approach is most applicable for special-purpose properties like churches, schools, and government buildings because there are few comparable sales and these properties typically don't generate market rental income. The cost approach estimates land value plus depreciated cost of improvements to estimate total property value.
Related Minnesota Property Valuation Questions
- In a declining market, a Minnesota appraiser using the sales comparison approach should:
- In the income capitalization approach, if a Minnesota rental property has a Net Operating Income (NOI) of $48,000 and the capitalization rate is 6%, what is the estimated value?
- In a competitive market analysis (CMA), a Minnesota agent adjusts a comparable sale that has one fewer bathroom than the subject property by:
- A Minnesota real estate agent is asked to provide a Comparative Market Analysis (CMA) to help a seller price their home. A CMA differs from an appraisal in that:
- In the sales comparison approach, adjustments to comparables are made because:
- A Minnesota apartment building's income statement shows effective gross income of $180,000 and operating expenses of $75,000 (excluding mortgage payments). The NOI is:
- A Minnesota appraiser identifies that a comparable sale was a 'related party transaction' (sale between family members). How should this be treated?
- A Minnesota appraiser is conducting an appraisal for a property in a declining market. The appraiser should:
Practice More Minnesota Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Minnesota Quiz →