Property Valuation
In New York, a 'capitalization rate' (cap rate) reflects:
AThe property's tax rate
BThe market's expected rate of return on a real estate investment, derived from comparable sales✓ Correct
CThe mortgage interest rate
DThe local property tax mill rate
Explanation
A cap rate is an indicator of the market's expected rate of return for a specific type and class of investment property, derived by dividing recent comparable properties' NOI by their sale prices. It reflects the relationship between income and value.
Related New York Property Valuation Questions
- The 'sales comparison approach' to value is most reliable when:
- The principle of 'substitution' in real estate appraisal states that:
- In New York, the 'gross building area' (GBA) of a property differs from 'net rentable area' (NRA) in that:
- When comparable sales show a consistent upward trend in prices over the prior 6 months, an appraiser may make a 'market conditions' or 'time' adjustment to:
- In New York, when a commercial property's lease has above-market (contract) rents, the appraiser considers this through:
- In New York, the 'principle of change' in property valuation recognizes that:
- In the cost approach, the value estimate is derived from:
- In New York, the 'cost to cure' method of measuring curable depreciation uses:
Practice More New York Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free New York Quiz →