Property Valuation
In Ohio, which type of commercial property is most commonly valued using the sales comparison approach in a market with sufficient sales activity?
ASingle-tenant industrial buildings
BResidential income properties (small multifamily)
CSingle-family investment homes✓ Correct
DSmall retail strip centers
Explanation
Single-family investment homes (even when rented) are frequently appraised using the sales comparison approach because the secondary market for these properties relies heavily on comparable residential sales.
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Key Terms to Know
Comparable Sales (Comps)
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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