Property Valuation
A Virginia appraiser uses a 1.5% monthly rent factor to estimate rent for a subject property. If the property value is $300,000, what is the estimated monthly rent?
A$3,000✓ Correct
B$4,500
C$2,000
D$3,500
Explanation
Monthly rent = Value × Monthly Rent Factor = $300,000 × 0.01 = $3,000.
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Key Terms to Know
Appraisal
A 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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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