Property Valuation
In Wyoming, a leasehold estate has value when:
AAll leases create leasehold value
BThe contract rent is below market rent, creating a positive leasehold value for the tenant✓ Correct
CThe contract rent is above market rent
DThe lease term exceeds 99 years
Explanation
A leasehold estate has positive value to the tenant when the contract rent is below current market rent (tenant is paying less than market). The difference between market rent and contract rent, discounted over the remaining lease term, represents the leasehold value.
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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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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