Property Valuation
When a Rhode Island appraiser estimates the value of a duplex using the gross rent multiplier method, they divide the sale price of comparables by their annual gross rents to derive the GRM. The subject property has annual gross rents of $30,000 and the market GRM is 12. What is the indicated value?
A$250,000
B$360,000✓ Correct
C$420,000
D$480,000
Explanation
Value = Annual Gross Rents x GRM = $30,000 x 12 = $360,000. Using the values given ($30,000), apply the appropriate formula.. The correct answer is $360,000.. This is a common calculation on the Rhode Island real estate exam.
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