Property Valuation
In Texas, the income approach formula is:
AValue = NOI × Cap Rate
BValue = NOI ÷ Cap Rate✓ Correct
CValue = Gross Income − Expenses
DValue = Land Value + Building Value
Explanation
The income approach formula is: Value = NOI ÷ Cap Rate. For example, if NOI = $100,000 and the cap rate = 8%, then Value = $100,000 ÷ 0.08 = $1,250,000.
Related Texas Property Valuation Questions
- Texas ad valorem taxes are assessed by the county appraisal district. An agricultural landowner can reduce their taxes through the 'productivity value' (1-d-1) appraisal, which values the land based on:
- The term 'as-is' value in a Texas appraisal means:
- A Texas appraiser determines that a property's highest and best use is commercial rather than its current residential use. For appraisal purposes, the appraiser should:
- A Texas appraiser determines a capitalization rate using market extraction. This process involves:
- Texas appraisers must comply with USPAP (Uniform Standards of Professional Appraisal Practice). USPAP Standard 1 addresses:
- In Texas, the excess land technique in appraising a property means:
- 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:
- An appraiser uses three approaches to value a Texas mixed-use property with residential and retail space. The MOST appropriate approach to emphasize is:
Practice More Texas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Texas Quiz →