How should rent survey data be applied in the income approach?
Correct Answer
A) As market evidence tested against local rentals
Why this is correct: A rent survey provides aggregated market data. Its utility lies in serving as a benchmark or secondary evidence. The appraiser must test it against verified local rental comparables specific to the subject property to determine if the survey's data is applicable and to support a credible market rent estimate. Why the other choices are wrong: "As a substitute for the subject's actual rent roll" is incorrect; the subject's contract rent may not reflect market rent and should be analyzed separately. "As a figure requiring no further verification" is incorrect; all data should be verified for applicability. "As applicable only to residential property types" is incorrect; rent surveys are used for various property types. Exam tip: Use surveys as a check, not as the primary source. Always verify against direct market evidence.
Why This Is the Correct Answer
Why this is correct: A rent survey provides aggregated market data. Its utility lies in serving as a benchmark or secondary evidence. The appraiser must test it against verified local rental comparables specific to the subject property to determine if the survey's data is applicable and to support a credible market rent estimate. Why the other choices are wrong: "As a substitute for the subject's actual rent roll" is incorrect; the subject's contract rent may not reflect market rent and should be analyzed separately. "As a figure requiring no further verification" is incorrect; all data should be verified for applicability. "As applicable only to residential property types" is incorrect; rent surveys are used for various property types. Exam tip: Use surveys as a check, not as the primary source. Always verify against direct market evidence.
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