Property Valuation
Capitalization rate (cap rate) is calculated as:
AGross rent divided by purchase price
BNet operating income divided by property value✓ Correct
CTotal income divided by total expenses
DMortgage payment divided by property value
Explanation
Cap rate = Net Operating Income ÷ Property Value. It is used to estimate the value of income-producing properties or compare investment returns.
Related Nebraska Property Valuation Questions
- An appraisal for a federally related mortgage transaction in Nebraska requires the appraiser to include a:
- Highest and best use of a property is defined as the use that is:
- The principle of progression in real estate states that:
- Accrued depreciation in the cost approach is:
- External (economic) obsolescence is a form of depreciation caused by:
- A value-in-use estimate differs from market value in that value-in-use:
- Nebraska farmland productivity ratings (PI ratings) are used by appraisers to:
- An appraiser notes that a home has only one bathroom while most comparable homes have two. This would likely be treated as:
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