Property Valuation
What is the income multiplier method for valuing small residential rental properties?
AValue = Monthly rent x 100
BValue = Annual gross income x a market-derived multiplier (GIM)✓ Correct
CValue = Monthly rent x cap rate
DValue = Annual NOI / multiplier
Explanation
The Gross Income Multiplier (GIM) method: Value = Gross Annual Income x GIM. The GIM is derived from comparable sales. For example, a property with $24,000 gross income and a GIM of 8 would have an indicated value of $192,000.
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