Property Valuation
Gross Rent Multiplier (GRM) is used to:
ACalculate net operating income
BQuickly estimate the value of a rental property by multiplying monthly gross rent by the GRM✓ Correct
CDetermine the capitalization rate for a property
DCalculate the mortgage payment on an investment property
Explanation
The GRM provides a quick valuation estimate: Property Value = Monthly Gross Rent × GRM. GRMs are derived from comparable sales. While quick, GRM ignores expenses and vacancies—the cap rate and income approach provide more precise valuations.
Related Utah Property Valuation Questions
- The sales comparison approach to appraisal is most reliable when:
- The effective age of a building refers to:
- The income approach yields the highest value indication when:
- Accrued depreciation in the cost approach is the sum of:
- The most common appraisal approach used for single-family homes in the Wasatch Front area (Salt Lake City, Provo, Ogden) is:
- The principle of conformity in real estate appraisal suggests that value is maximized when:
- The principle of regression in appraisal states:
- In a declining Utah real estate market, a property listed and sold quickly at a competitive price is called:
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