Property Valuation
The income capitalization approach calculates value by:
AEstimating replacement cost minus depreciation
BDividing net operating income (NOI) by the capitalization rate✓ Correct
CComparing recent sales of similar properties
DAdding land value to improvements value
Explanation
The income capitalization approach uses the formula: Value = NOI / Capitalization Rate. It is most appropriate for income-producing properties such as commercial buildings and apartment complexes.
Related Oklahoma Property Valuation Questions
- In Oklahoma's rural areas, the land residual technique for valuing agricultural land separates:
- The gross rent multiplier (GRM) method estimates value by:
- An appraiser determines a subject property's value using the gross rent multiplier (GRM). The property rents for $1,800/month and comparable properties sell for 120 times monthly rent. The estimated value is:
- An appraisal report prepared for federally related transactions in Oklahoma must be completed by:
- External obsolescence differs from functional obsolescence in that external obsolescence:
- An appraisal adjustment for a feature in the sales comparison approach is made to:
- The term 'as-improved' value means:
- An Oklahoma appraiser who values agricultural land must consider which unique income source beyond typical residential factors?
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