Property Valuation
In New York, when a commercial property's income stream is uneven or the investor expects to hold for a specific period and then sell, the appraiser may use:
AThe sales comparison approach only
BDiscounted cash flow (DCF) analysis to present-value the projected income and reversion✓ Correct
CThe cost approach only
DA GRM based on projected rents
Explanation
Discounted cash flow (DCF) analysis is used to value income-producing properties when the income stream is irregular or when the investor's holding period and projected sale price (reversion) are important. It calculates the present value of all future cash flows.
Related New York Property Valuation Questions
- In New York, an assessor determines a property's 'assessed value' for tax purposes, which is often expressed as a percentage of:
- In a New York appraisal using the cost approach, 'depreciation' refers to:
- What does 'highest and best use' mean in real estate appraisal?
- A New York appraiser is performing a 'comparative market analysis' (CMA). This is different from an appraisal because:
- In New York, the 'principle of change' in property valuation recognizes that:
- The principle of 'conformity' states that:
- The 'sales comparison approach' to value is most reliable when:
- In New York, a 'capitalization rate' (cap rate) reflects:
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