When analyzing income and expense data for a multi-tenant office building to develop an opinion of market value, an appraiser includes revenue from parking fees collected by the owner. In the appraiser's income and expense analysis, these parking fees should be treated as part of:
Correct Answer
C) Other Income.
Revenue from sources such as parking, vending machines, or laundry facilities that are incidental to the primary rental of real property is typically classified as 'Other Income.' It is added to effective gross income (which is derived from Potential Gross Income minus vacancy and collection loss) to arrive at a total income figure before operating expenses.
Why This Is the Correct Answer
Revenue from sources such as parking, vending machines, or laundry facilities that are incidental to the primary rental of real property is typically classified as 'Other Income.' It is added to effective gross income (which is derived from Potential Gross Income minus vacancy and collection loss) to arrive at a total income figure before operating expenses.
More Income Approach Questions
In a percentage lease, rent is commonly structured as:
In a DCF, what is the reversion?
Potential gross income differs from effective gross income in that PGI assumes:
The reversion in a discounted cash flow model represents:
Building A (new, credit tenant, 20-year lease) and Building B (older, month-to-month tenants) sell the same week. Their cap rates should differ how?
An overall rate extracted from a sale whose NOI excluded reserves, applied to a subject NOI that includes them, will:
Replacement reserves cover which kind of expenditure?
What is the primary distinction, for appraisal purposes, between 'vacancy loss' and 'collection loss'?
An appraiser is analyzing a mixed-use property with retail and office components. The retail segment has a potential gross income of $180,000 with a market vacancy of 8%. The office segment has a potential gross income of $120,000 with a market vacancy of 12%. What is the overall effective gross income for the property?
The mortgage constant represents:
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A rental house sold for $396,000 and rents for $2,200 a month. Its monthly gross rent multiplier is:
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A certified general appraiser is valuing a regional shopping center subject to long-term triple-net leases. One anchor tenant occupies 40% of the GLA under a 12-year lease with fixed annual rent of $1.2 million; the remaining space is leased to smaller tenants at market rates, with rents projected to grow at 2.5% per year. The appraiser develops a discounted cash flow model with a 10-year holding period. Which statement best reflects the appropriate treatment of the anchor tenant’s rent in the DCF model?