Property Valuation
Gross rent multiplier (GRM) is calculated as:
ANet operating income divided by cap rate
BSale price divided by gross monthly or annual rental income✓ Correct
CGross income multiplied by operating expenses
DMonthly rent divided by property value
Explanation
GRM = Sale Price ÷ Gross Rental Income. It is a quick valuation tool that compares a property's price to its gross rental income without accounting for expenses.
Related Montana Property Valuation Questions
- A Montana appraiser uses a 'capitalization rate' that is higher than that used for a comparable property in a more desirable Bozeman neighborhood. This higher cap rate reflects:
- When an appraiser in Billings, Montana observes that comparable sales in the area have been selling faster than 6 months ago, this indicates:
- Plottage value is created when:
- An appraiser using the cost approach for a Bozeman single-family home calculates that the improvements have 20% physical depreciation. If the structure's reproduction cost is $250,000, what is the depreciated value of the improvements?
- In the cost approach to value in Montana, 'reproduction cost' differs from 'replacement cost' in that:
- In Montana, a 'retroactive appraisal' (appraisal for a past effective date) may be required for:
- A Montana appraiser is reconciling the three approaches to value for a Missoula single-family home and gives the most weight to the sales comparison approach because:
- The principle of anticipation holds that value is based on:
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