Income Approach

A property generates $85,000 in Net Operating Income and sells for $1,062,500. What is the overall capitalization rate?

In the band of investment technique for developing a capitalization rate, if the mortgage component is 75% at 5.5% and equity component is 25% at 12%, what is the overall rate?

A property has effective gross income of $120,000 and operating expenses of $45,000. If the capitalization rate is 8.5%, what is the indicated value?

A property has a potential gross income of $180,000, vacancy and collection loss of 7%, and operating expenses of $65,000. What is the NOI?

The Gross Rent Multiplier (GRM) for a property is calculated as:

The principle of surplus productivity states that:

A property generates $120,000 in net operating income and is valued at $1,500,000. What is the capitalization rate?

A building has potential gross income of $180,000, vacancy and collection loss of 8%, and operating expenses of $54,000. What is the net operating income?

A commercial property has a potential gross income of $180,000, vacancy and collection losses of $9,000, and operating expenses of $54,000. What is the net operating income (NOI)?

An office building has a gross rental income of $240,000, vacancy rate of 8%, and operating expenses of $75,000. What is the net operating income (NOI)?

A property's current use as a gas station generates $50,000 annual net income. Analysis shows the highest and best use as vacant would be for apartments generating $75,000 annual net income, but demolition costs are $40,000. Using a 10% cap rate, what is the highest and best use as improved?

A property sold for $450,000 and generates $3,750 in monthly gross rent. What is the gross rent multiplier (GRM)?

Using the band of investment technique, if the loan-to-value ratio is 75% with a mortgage constant of 7.5%, and the equity capitalization rate is 12%, what is the overall capitalization rate?

In a band of investment calculation, if the mortgage component is 75% at 6% and the equity component is 25% at 12%, what is the overall capitalization rate?

What is the present value of $150,000 to be received in 5 years, assuming a discount rate of 8%?

The mortgage-equity technique is used to:

A property is purchased for $800,000 with a $600,000 loan. What is the loan-to-value ratio?

A commercial property has an annual NOI of $85,000 and annual debt service of $65,000. What is the debt coverage ratio?

An investor purchased a property for $900,000 with $270,000 cash down. The annual cash flow before taxes is $24,300. What is the equity dividend rate?

What is the gross rent multiplier (GRM) for a property that sold for $480,000 with monthly rental income of $3,200?

A property generates annual cash flow of $24,000 to equity. The initial equity investment was $200,000. What is the equity dividend rate?

An income stream of $50,000 per year for 10 years, with a discount rate of 8%, has what present value? (Use PV factor of 6.71)

A property is valued at $800,000 with a loan amount of $640,000. What is the loan-to-value ratio?

Using the band of investment method, if the mortgage component is 75% at 6% and the equity component is 25% at 12%, what is the overall capitalization rate?

A commercial property has annual gross income of $240,000 and sold for $2,000,000. What is the gross income multiplier (GIM)?

What is the capitalization rate for a property that sold for $1,500,000 with an annual NOI of $120,000?

What is the present value of $100,000 to be received in 5 years, assuming a 10% discount rate?

A property has a net operating income of $85,000 and annual debt service of $68,000. What is the debt coverage ratio?

An investor pays $120,000 cash down on a $400,000 property and receives $15,000 annual cash flow before taxes. What is the equity dividend rate?

Which of the following is NOT typically included in operating expenses for income capitalization?

An income stream of $10,000 per year for 10 years, discounted at 8%, has what present value? (PV factor for 10 years at 8% = 6.710)

A property has potential gross income of $150,000, vacancy and collection loss of 5%, and operating expenses of $45,000. What is the net operating income?

When appraising the landlord's interest in a property subject to a long-term lease below market rent, the appraiser is valuing the:

A property is purchased for $500,000 with a loan of $400,000. What is the loan-to-value ratio?

An investment property is expected to generate $50,000 annually for 10 years, with a reversion value of $800,000. Using a 9% discount rate, what is the present value of the reversion only?

A property sold for $400,000 with annual gross rent of $40,000. What is the gross rent multiplier?

Using the band of investment technique, calculate the overall capitalization rate given: mortgage at 70% LTV with 6% rate, and equity at 30% with 12% required return.

A building's gross rent multiplier (GRM) is 120. If the monthly rent is $2,500, what is the indicated value?

An income-producing property generates $120,000 in net operating income and has a market value of $1,500,000. What is the capitalization rate?

Using the band of investment method, if the mortgage component is 75% at 6% and the equity component is 25% at 12%, what is the overall capitalization rate?

A property generates NOI of $75,000 and has annual debt service of $60,000. What is the debt coverage ratio?

A property generates $48,000 in annual net operating income. Using a capitalization rate of 8%, what is the indicated value using direct capitalization?

A property has equity of $200,000 and generates annual cash flow before taxes of $18,000. What is the equity dividend rate?

An income-producing property generates a net operating income of $48,000 annually and was purchased for $600,000. What is the capitalization rate?

Which factor would have the LEAST impact on the value of a leasehold interest?

A property's highest and best use analysis shows that retail use would generate $50,000 annual net income, office use would generate $45,000, and residential use would generate $40,000. Using a 10% capitalization rate, what is the indicated value for retail use?

A commercial property has potential gross income of $240,000. Recent market data indicates vacancy rates of 8%, 12%, and 6% for similar properties. Using the mean vacancy rate, what is the effective gross income?

A rental property generates $120,000 in gross annual income. Operating expenses are $45,000. If the overall capitalization rate is 8%, what is the indicated value using direct capitalization?

Which of the following is NOT typically deducted when calculating Net Operating Income (NOI)?

The band of investment technique is used to: