Property Valuation
In the income approach to value, a South Carolina appraiser uses the capitalization rate to:
ACalculate the property's assessed value for tax purposes
BConvert net operating income into an estimate of property value✓ Correct
CDetermine the property's replacement cost
DCalculate the depreciation of improvements
Explanation
The capitalization rate (cap rate) is applied to Net Operating Income (NOI) to estimate value: Value = NOI / Cap Rate. This income approach is particularly useful for investment and commercial properties.
Related South Carolina Property Valuation Questions
- In South Carolina, a 'letter of intent' (LOI) in a commercial real estate transaction is:
- A South Carolina appraiser notes that a property is located in a transitional neighborhood. This is relevant to which appraisal principle?
- In South Carolina, the 'principle of conformity' holds that:
- A South Carolina appraiser uses the cost approach. The replacement cost new is $300,000, and total depreciation is $60,000. The land value is $50,000. What is the indicated value?
- In South Carolina, the 'gross building area' (GBA) for a residential appraisal is measured:
- What does the term 'extraordinary assumption' mean in a South Carolina USPAP-compliant appraisal?
- What does 'retrospective appraisal' mean in South Carolina appraisal practice?
- In South Carolina, what does 'effective age' mean in the context of property appraisal?
Practice More South Carolina Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free South Carolina Quiz →