Property Valuation
When appraising a 20-unit apartment building, the MOST appropriate primary appraisal method is:
ASales comparison approach
BCost approach
CIncome capitalization approach✓ Correct
DGross rent multiplier approach
Explanation
For income-producing properties like apartment buildings, the income capitalization approach is the primary method used by appraisers. It values the property based on its ability to generate income, reflecting how investors view and buy such properties.
People Also Study
Related South Carolina Questions
- Which of the following South Carolina properties would most likely use the cost approach as the primary valuation method?Property Valuation
- In the income approach for South Carolina commercial properties, which of the following is a direct capitalization technique?Property Valuation
- The 'stabilized occupancy' assumption used in a South Carolina income approach appraisal represents:Property Valuation
- Which approach to value is most appropriate for appraising a single-family residence in a South Carolina suburb?Property Valuation
Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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.
Math Concepts
Study This Topic
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 →