Property Valuation
What is a market rent versus contract rent in Nevada property valuation?
AThey are always equal in competitive markets
BMarket rent is the rent a property could command in the open market; contract rent is the actual rent currently being paid under an existing lease✓ Correct
CMarket rent is set by the state; contract rent is set privately
DMarket rent applies to commercial properties; contract rent to residential
Explanation
Market rent is what a property could command if leased at today's market rates. Contract rent is what the tenant is currently paying.
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Key Terms to Know
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.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
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