Property Valuation
A Nebraska commercial property's capitalization rate decreases from 7% to 6%. With the same NOI, the property value:
ADecreases
BIncreases✓ Correct
CStays the same
DCannot be determined
Explanation
Value = NOI ÷ Cap Rate. As the cap rate decreases (denominator decreases), the value increases. Lower cap rates reflect higher investor demand or lower risk, indicating higher property values.
Related Nebraska Property Valuation Questions
- When using the sales comparison approach, an appraiser finds a comparable sale that is superior to the subject in terms of lot size. The appraiser should:
- In Nebraska farmland valuation, which factor has the greatest impact on per-acre value?
- An appraiser who is asked to value a property for an estate sale must be careful that the value is as of:
- A value-in-use estimate differs from market value in that value-in-use:
- The principle of contribution in real estate valuation states that:
- A Nebraska appraiser is determining the depreciation on a 20-year-old building with an economic life of 50 years. Using the straight-line method, the depreciation percentage is:
- When using the sales comparison approach in Nebraska, an appraiser adds $8,000 to the comparable sale because the comparable LACKS a feature the subject has. This is called a:
- A Nebraska appraiser uses the cost approach. The replacement cost of a building is $450,000. Total depreciation is $90,000. Land value is $75,000. The indicated value is:
Practice More Nebraska Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Nebraska Quiz →