Property Valuation
In real estate appraisal, 'economic rent' refers to:
ARent that is set by government economic agencies
BThe rent a property would command in the open market based on current market conditions✓ Correct
CThe amount of rent that the tenant has agreed to pay under their lease
DThe average rent in the neighborhood
Explanation
Economic rent (also called market rent) is the rent a property would generate in the open market based on current supply and demand, regardless of existing lease terms. When a property's contract rent differs from market rent, appraisers must analyze both. Above-market leases create leased fee value above fee simple value; below-market leases do the opposite.
Related Texas Property Valuation Questions
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