Property Valuation
In South Dakota, the 'income approach' to appraisal is most applicable to:
ASingle-family owner-occupied homes
BIncome-producing properties such as apartment buildings, office buildings, and shopping centers✓ Correct
CVacant land without improvements
DHistoric properties with special aesthetic value
Explanation
The income approach (capitalizing NOI) is most applicable to income-producing properties where investors base purchasing decisions on income potential. It is less meaningful for single-family homes (which are not typically purchased for rental income) or vacant land.
Related South Dakota Property Valuation Questions
- An appraisal report for a South Dakota property prepared for a federally related transaction must be performed by:
- In South Dakota, a 'drive-by appraisal' differs from a full appraisal primarily because:
- 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:
- A South Dakota property appraiser finds that a comparable sold for $250,000 with seller concessions of $8,000. What is the adjusted sale price for comparison purposes?
- The 'principle of substitution' in real estate valuation means:
- In South Dakota, which type of property would be most difficult to appraise using the sales comparison approach?
- A South Dakota appraisal is performed for a federally related transaction. The appraiser must comply with:
- In South Dakota, 'capitalization rate' and 'discount rate' are related but different. The cap rate is used for:
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