Property Valuation
A capitalization rate is used to convert a property's:
AGross rent into a sales price
BNet operating income into an estimated value✓ Correct
CReplacement cost into depreciated value
DGross income into net income
Explanation
Value = NOI ÷ Cap Rate. The cap rate converts a property's annual net operating income into an indication of market value.
Related New Jersey Property Valuation Questions
- The 'principle of contribution' in appraisal states that the value of a component is measured by:
- Assemblage in real estate refers to:
- Market value is defined as:
- An appraisal performed for a NJ federally-related mortgage transaction must be completed by:
- In the cost approach, the appraiser estimates value by:
- In NJ real estate appraisal, 'highest and best use' is defined as the reasonably probable use of property that is:
- In New Jersey's active suburban real estate market, which valuation approach is most commonly used for single-family residential appraisals?
- The NJ property tax assessment process involves determining the ratio of assessed value to market value, known as the:
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