Property Valuation
The income approach to value uses which formula?
AValue = Income x Rate
BValue = Income / Capitalization Rate✓ Correct
CValue = Cost + Depreciation
DValue = Sales Price + Adjustments
Explanation
The income approach formula is Value = Net Operating Income / Capitalization Rate (V = I/R). A higher cap rate results in a lower value; a lower cap rate results in a higher value.
Related North Dakota Property Valuation Questions
- What is 'functional obsolescence' as it applies to a 1960s-era home in Grand Forks, ND?
- An appraiser adjusting comparable sales for North Dakota property condition differences uses the principle that:
- A North Dakota office building has a potential gross income of $100,000, vacancy and credit losses of 10%, and operating expenses of $35,000. What is the NOI?
- A North Dakota appraiser is making adjustments to comparable sales. If a comparable home sold for $250,000 but has an extra bathroom that the subject property lacks, the appraiser would:
- Functional obsolescence in appraisal refers to:
- In North Dakota, which of the following BEST describes 'economic life' of a building?
- A North Dakota property with significant deferred maintenance would be described as having:
- Reconciliation in the appraisal process involves:
Practice More North Dakota Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free North Dakota Quiz →