Property Valuation
A South Dakota appraisal using the gross rent multiplier (GRM) divides the sale price by:
ANet operating income
BMonthly gross rent✓ Correct
CAnnual property taxes
DReplacement cost new
Explanation
GRM = Sale Price ÷ Monthly Gross Rent. The GRM is a quick valuation tool for residential rental properties, though it is less precise than a full income approach analysis.
Related South Dakota Property Valuation Questions
- A South Dakota residential appraiser must complete how many hours of approved education to maintain their certified residential appraiser license?
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- In South Dakota, an 'arm's length transaction' in real estate means:
- South Dakota property taxes are based on 'assessed value.' When the county assessor increases assessed values, property owners who disagree may:
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- In the sales comparison approach to value, an appraiser makes adjustments to comparable sales for differences between the comparable and the subject property. If a comparable sale has a feature the subject property lacks, the appraiser should:
- In South Dakota, the income approach to value divides net operating income by the capitalization rate to estimate:
- A South Dakota property's market value is estimated at $250,000 using the sales comparison approach and $280,000 using the cost approach. The appraiser reconciles the value at $255,000. This process is called:
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