Property Valuation
What is 'frontage' and how does it affect the value of commercial property in Pennsylvania?
AThe number of parking spaces visible from the street
BThe width of a property along the street (road frontage), which is critical for commercial visibility, access, and land valuation✓ Correct
CThe distance from the front of a building to the street, regulated by setback requirements
DThe percentage of a building's facade consisting of windows
Explanation
Frontage is the length of a property's boundary along a street or road. Commercial properties value frontage highly because it determines visibility to passing traffic, the number of access points possible, and signage opportunities.
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Key Terms to Know
Gross Rent Multiplier (GRM)
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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