Property Valuation
In NJ, the 'income multiplier' approach (GRM or GIM) to valuing small income properties is considered a:
AHighly precise method equivalent to the full income approach
BQuick estimation technique that is less precise than a full income capitalization approach✓ Correct
CReplacement for the sales comparison approach
DRequired method for all residential income properties
Explanation
GRM/GIM approaches are quick, simplified estimation tools. They do not account for expenses, vacancy, or other factors affecting NOI as thoroughly as a complete income capitalization analysis, making them less precise but useful for quick checks.
Related New Jersey Property Valuation Questions
- The sales comparison approach to value is MOST appropriate for valuing:
- The income capitalization approach to value is most appropriate for:
- A 'going-concern value' appraisal is used for:
- The cost approach to value would be most reliable for which type of property?
- In the sales comparison approach, adjustments are made to the comparable sales to:
- A property has a net operating income of $48,000 and is valued at $600,000. What is the cap rate?
- In a NJ appraisal, 'market value' is most accurately defined as:
- Which appraisal approach estimates value by calculating the cost to replace or reproduce improvements minus depreciation, plus land value?
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