Property Valuation
In Minnesota real estate, 'market rent' refers to:
AThe rent currently charged by the property owner
BThe rent a property would command in the open market between a willing landlord and tenant✓ Correct
CThe minimum rent allowed under state rent control
DThe average rent for all properties in the city
Explanation
Market rent is the rent a property would command in an open, competitive market between informed, arm's-length parties. It may differ from contract rent (the rent actually being paid).
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Key Terms to Know
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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
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