Property Valuation
Which appraisal method would be most appropriate for a historic mansion in Newport being converted to a bed and breakfast?
ACost approach only
BIncome approach, with consideration of cost and sales comparison approaches✓ Correct
CSales comparison approach using standard residential sales
DAssessed value only
Explanation
A historic mansion being converted to a B&B is an income-producing property. The income approach would be primary, with support from cost (reproduction value of historic structure) and sales comparison (if comparable properties exist). Unique properties require all applicable approaches.
Related Rhode Island Property Valuation Questions
- In the sales comparison approach, an appraiser makes a positive adjustment to a comparable when:
- The income approach to value is most appropriate for valuing:
- In Rhode Island, an appraiser values a single-family home using the cost approach. After estimating the land value at $80,000 and the depreciated cost of improvements at $220,000, what is the indicated value?
- A Rhode Island appraiser uses the 'income approach' to value a property. This approach is most appropriate for:
- In Rhode Island, the 'effective age' of a building used in appraisal refers to:
- An appraiser is valuing a 10-unit apartment building in Providence. Using the gross rent multiplier (GRM) method with an annual GRM of 12 and annual gross rent of $180,000, what is the indicated value?
- In Rhode Island, what is 'depreciation' in the context of the cost approach to appraisal?
- An appraiser in Rhode Island determines that a property's value is $375,000. The purchase price was $395,000. What does this mean for an FHA loan?
Practice More Rhode Island Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Rhode Island Quiz →