Property Valuation
A Wyoming ranch appraiser would use the income approach by capitalizing the:
ASale price of the property
BNet income from agricultural operations including grazing, hay production, and mineral royalties✓ Correct
CAssessed value as determined by the county
DTotal replacement cost of improvements
Explanation
For income-producing Wyoming ranches, the income approach capitalizes the net income from all agricultural operations (cattle grazing, hay and crop production) and any mineral royalties. This provides a value indication based on the ranch's earning capacity.
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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.
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.
Math Concepts
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