Property Valuation
An Oklahoma oil and gas royalty income stream would most likely be valued using which appraisal approach?
ASales comparison approach using land sales
BIncome approach (discounted cash flow or capitalization of income)✓ Correct
CCost approach only
DAssessed value from the county assessor
Explanation
Oil and gas royalties represent an income stream from mineral production. They are most appropriately valued using the income approach — either capitalizing the income or discounting projected future cash flows at an appropriate discount rate.
Related Oklahoma Property Valuation Questions
- Oklahoma ranch and farm real estate sales are tracked by university extension services and farm credit organizations. This data is important for appraisers because:
- An Oklahoma property's value is depressed because the neighborhood is transitioning from residential to commercial use. This is an example of which type of depreciation?
- The gross rent multiplier (GRM) method estimates value by:
- Reproduction cost in the cost approach is:
- Principles of value state that value is created by the interaction of supply and demand. Which principle holds that value is influenced by what a prudent buyer would pay for a similar property?
- Which appraisal approach is most commonly used to value single-family residential properties?
- When using the sales comparison approach, an appraiser finds a comparable that sold for $300,000. The comparable has a 2-car garage worth $10,000 but the subject property does not. The appraiser should:
- An Oklahoma appraiser's final opinion of value in an appraisal report is expressed as:
Practice More Oklahoma Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Oklahoma Quiz →