Property Valuation
Vermont's economic base analysis for real estate investment examines:
AThe property's foundation and structural base
BThe economic drivers of a local market — employers, industries, and income sources — that support real estate demand✓ Correct
CThe tax base of the municipality
DThe base rent in comparable leases
Explanation
Economic base analysis examines the fundamental economic drivers of a region — major employers, key industries, population trends — that create demand for real estate. A strong economic base supports stable or growing property values.
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Key Terms to Know
Gross Rent Multiplier (GRM)
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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