Property Valuation
A Vermont appraiser uses the income approach by:
AComparing the property to recent sales
BDividing net operating income by the capitalization rate✓ Correct
CAdding land value to depreciated improvements
DMultiplying gross rent by a market multiplier only
Explanation
The income approach values property by dividing the property's net operating income (NOI) by a market-derived capitalization rate: Value = NOI / Cap Rate. It is primarily used for income-producing properties.
Related Vermont Property Valuation Questions
- Vermont's 'direct capitalization' approach to income property valuation is most reliable when:
- Which Vermont market factor would most likely DECREASE property values in a resort community?
- When a Vermont appraiser uses the 'paired sales analysis' to measure the value impact of a specific feature, they:
- Vermont's 'appraisal review' process involves:
- Vermont's 'retrospective appraisal' is conducted to establish value as of:
- An appraiser is estimating the value of a Vermont lake house. The property has a direct sandy beach that adds significant value. How would the appraiser capture this value?
- Vermont's 'tax assessed value' is useful in appraisal as:
- Vermont's 'operating expense ratio' for an income property is:
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