Property Valuation
An appraiser uses the income approach to value a net-leased retail property in Kirkland. The tenant pays all operating expenses. In this case, the cap rate is applied to:
AGross scheduled income
BNet operating income (contract rent less any lessor expenses)✓ Correct
CEffective gross income
DPotential gross income
Explanation
Even in a NNN lease where the tenant pays all operating expenses, the cap rate is still applied to the Net Operating Income (NOI). For a pure NNN lease, NOI approximates the contract rent since the landlord's operating expenses are minimal.
Related Washington Property Valuation Questions
- In Washington, the 'land residual technique' is an income capitalization method used to value:
- In Washington, which of the following is NOT a function of the county assessor?
- When using the cost approach, an appraiser estimates the cost to replace a building with a similar building using current materials and construction methods. This is called:
- In Washington, a broker competitive market analysis (CMA) is used primarily for:
- In Washington, a 'desk review' of an appraisal by a lender's review appraiser involves:
- The principle of substitution states that a buyer will pay no more for a property than the cost of acquiring an equally desirable substitute. This principle:
- Effective age differs from actual age in appraisal because:
- In Washington, an 'as-improved' appraisal provides a value estimate that reflects:
Practice More Washington Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Washington Quiz →