Property Valuation
In real estate appraisal, 'market rent' versus 'contract rent' is relevant because:
AThey are always the same amount
BContract rent (actual lease amount) may be above or below market rent; the difference affects income approach value✓ Correct
CMarket rent is set by the government; contract rent is privately negotiated
DMarket rent only applies to commercial properties
Explanation
Market rent is what a property could rent for in the open market. Contract rent is what is actually being paid under an existing lease. If a property is leased below market rent, value may be 'locked in' until lease renewal. If leased above market, there is a risk of vacancy when the lease expires. Appraisers analyze both when using the income approach.
Related Texas Property Valuation Questions
- The principle of 'contribution' in real estate appraisal means:
- In Texas, the ad valorem property tax is based on:
- Texas Property Tax Code requires that property be valued at market value. 'Market value' is defined as the price a property would bring if:
- A Texas property's assessed value for tax purposes ($380,000) differs from the appraised market value ($450,000). For a real estate sale, the relevant value is:
- In the cost approach to value, the appraiser estimates the value of the land separately because:
- When appraising a property for divorce proceedings or estate purposes in Texas, the appraiser's 'hypothetical condition' or 'extraordinary assumption' must be:
- Gross Rent Multiplier (GRM) is calculated as:
- In Texas, homestead exemptions reduce the taxable value of a primary residence. The standard homestead exemption for school district taxes (mandatory state minimum) is:
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