Property Valuation
The gross income multiplier (GIM) method of valuation uses which time period for income?
AMonthly income only
BAnnual income
CNet income only
DEither monthly or annual, but the multiplier must correspond to the same period✓ Correct
Explanation
The GIM (annual gross income multiplier) or GRM (monthly gross rent multiplier) may use either annual or monthly income figures. The multiplier derived from comparable sales must use the same income period as the subject property's income figure.
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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.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
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