Property Valuation
A capitalization rate in real estate is:
AThe interest rate on a mortgage
BThe rate of return used to convert an income stream into a value estimate✓ Correct
CThe annual rate of property appreciation
DThe tax rate applied to assessed value
Explanation
The capitalization rate (cap rate) is the rate of return an investor expects from an income property, used in the formula: Value = NOI / Cap Rate.
Related North Carolina Property Valuation Questions
- NC appraisers must comply with the Uniform Standards of Professional Appraisal Practice (USPAP). USPAP requires appraisers to provide:
- In NC appraisal practice, 'paired sales analysis' is used to:
- A NC appraiser who adds value to a comparable for its superior condition compared to the subject is:
- In the income approach, 'potential gross income' (PGI) assumes:
- Plottage value refers to:
- Progression in real estate value means:
- When appraising a property in NC, the appraiser's opinion of value must reflect the value as of a specific:
- A NC appraiser's use of 'comparables from the subject's immediate competitive market area' refers to:
Practice More North Carolina Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free North Carolina Quiz →