Property Valuation
The income approach to value is most appropriate for which Oklahoma property?
AOwner-occupied single-family home
BInvestment property such as an apartment complex, office building, or retail center where income data is available✓ Correct
CVacant residential lot
DGovernment-owned property
Explanation
The income approach converts expected future income into a present value estimate. It is most applicable to income-producing investment properties (apartments, offices, retail) where investors make decisions based on income potential.
People Also Study
Related Oklahoma Questions
- The income capitalization approach to value is most appropriate for valuing:Property Valuation
- Which appraisal approach is most commonly used to value single-family residential properties?Property Valuation
- The sales comparison approach to value is most appropriate for:Property Valuation
- The income capitalization approach calculates value by:Property Valuation
- A property in Oklahoma has a potential gross income of $72,000. Vacancy and collection loss is 6%. Operating expenses are $18,500. What is the NOI?Real Estate Math
- An Oklahoma commercial property produces annual NOI of $96,000. If similar properties sell at a 7.5% cap rate, what is the estimated value?Real Estate Math
- An Oklahoma investor receives a 12% annual return on their $380,000 investment. What is the annual income?Real Estate Math
- An Oklahoma investor evaluating a potential rental property should calculate which metric to compare the initial income yield to the purchase price?Finance
Key Terms to Know
Capitalization Rate (Cap Rate)
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Study This Topic
Practice More Oklahoma Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Oklahoma Quiz →