Property Valuation
A Virginia investor calculates the capitalization rate for a potential acquisition. If the cap rate is rising in the market, property values are generally:
ARising
BStable
CFalling✓ Correct
DUnaffected
Explanation
Cap rate and property value move inversely. As cap rates rise (investors require higher returns), values fall, assuming NOI stays constant. This often occurs in rising interest rate environments.
Related Virginia Property Valuation Questions
- Which depreciation category is typically considered 'curable' because the cost to fix it is less than the value added?
- A Virginia appraiser determines that a comparable sale occurred under 'atypical motivation' — the seller was under severe financial distress. This sale is considered:
- A Richmond area appraiser is performing a retrospective appraisal. This means the appraisal:
- A Virginia appraiser computes an overall rate (OAR) or cap rate using the 'market extraction method.' This involves:
- In the income approach to appraisal, 'potential gross income' (PGI) is defined as:
- A Virginia income-producing property has a NOI of $85,000 and sells for $1,000,000. What is the cap rate?
- A Virginia appraiser is required to develop an opinion of value that reflects the:
- In Virginia, real property market values in Northern Virginia have historically appreciated at higher rates than the state average. An appraiser would account for this with a:
Practice More Virginia Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Virginia Quiz →