Property Valuation
Which Nebraska appraisal approach is best for vacant land without income-producing improvements?
ACost approach
BIncome approach
CSales comparison approach✓ Correct
DGross rent multiplier
Explanation
The sales comparison approach is most appropriate for vacant land because there are no improvements to cost or income to capitalize. Comparable land sales provide the best market evidence of vacant land value.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Math Concepts
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