Property Valuation
In Ohio, an appraiser finds a 'stabilized vacancy rate' of 6% for an apartment market. This means the appraiser will:
AAssume 100% occupancy in the analysis
BApply a 6% vacancy deduction to potential gross income to estimate effective gross income✓ Correct
CIncrease the cap rate by 6%
DDiscard all comparables with vacancy above 6%
Explanation
The stabilized vacancy rate represents the market's typical long-term vacancy. Appraisers apply it to potential gross income to reflect realistic occupancy in their income analysis.
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