Income Approach

A property generates $85,000 in Net Operating Income and sells for $1,062,500. 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%?

A property has potential gross income of $180,000, vacancy and collection loss of $15,000, and operating expenses of $65,000. What is the Net Operating Income?

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

In a percentage lease, rent is commonly structured as:

A property generates $150,000 in potential gross income. Market data indicates a 7% vacancy rate and operating expenses of 35% of effective gross income. If the cap rate is 9.5%, what is the indicated value?

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

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

In a DCF, what is the reversion?

Potential gross income differs from effective gross income in that PGI assumes:

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

The reversion in a discounted cash flow model represents:

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?

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?

A commercial property has potential gross income of $120,000, vacancy and collection loss of 8%, and operating expenses of $35,000. Using a cap rate of 9.5%, what is the indicated value?

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)?

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

An overall rate extracted from a sale whose NOI excluded reserves, applied to a subject NOI that includes them, will:

A property is financed with 70% debt at 6% interest and 30% equity requiring a 12% return. What is the overall capitalization rate using the band of investment technique?

Replacement reserves cover which kind of expenditure?

A commercial property has a gross income of $240,000 annually and sold for $2,000,000. Three years later, a similar property with gross income of $180,000 is being appraised. Using the gross income multiplier method, what is the indicated value?

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?

An office building generates $180,000 in net operating income and has a capitalization rate of 8.5%. What is the indicated value?

A commercial property has a net operating income of $125,000 and is subject to a ground lease with annual rent of $15,000. What is the income attributable to the leased fee interest?

A property generates $75,000 in net operating income and is valued at $1,000,000. What is the overall capitalization rate?

A property has gross rental income of $120,000, vacancy and collection loss of $6,000, and operating expenses of $45,000. What is the net operating income?

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

A property has a gross income multiplier of 8.5 and generates annual gross income of $96,000. What is the indicated value?

A property sold for $450,000 and generated monthly rent of $3,200. What is the gross rent multiplier (GRM)?

A rental property has a potential gross income of $120,000, vacancy and collection loss of 5%, and operating expenses of $38,000. If the capitalization rate is 9%, what is the indicated value?

An income property sold for $1,500,000 and generates $125,000 in annual gross income. What is the gross income multiplier (GIM)?

The mortgage constant represents:

Applying a GRM of 164 to a subject renting at $2,650 monthly indicates a value of:

A property owner has a lease that requires them to pay property taxes, insurance, and maintenance costs in addition to base rent. The landlord's interest would be valued as:

In the context of the income approach, what does the term 'stabilized vacancy' refer to?

A 12-unit building rents at $1,450 per unit monthly with 6% vacancy and collection loss and $7,200 annual parking income. Effective gross income is:

Loading a capitalization rate for an effective tax rate is done when:

A property is valued at $800,000 with a first mortgage of $600,000. What is the loan-to-value ratio?

An investor purchased a property for $1,200,000 with a $900,000 loan. The property generates $25,000 in annual cash flow after debt service. What is the equity dividend rate?

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

Which item is NOT an operating expense in the appraisal sense?

A commercial property currently generates $100,000 annual net income. The building could be demolished and redeveloped for $2 million, generating $250,000 annual net income. Using a 10% cap rate, what is the value as improved?

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?

An appraiser is valuing a 20-unit apartment building. Recent sales of similar properties show gross rent multipliers ranging from 8.5 to 9.2. If the subject property generates $180,000 in annual gross rent, what is the indicated value range using GRM analysis?

Using the band of investment: 70% of the capital is debt with a mortgage capitalization requirement of 8%, and equity requires 11%. The overall rate is:

An appraiser derives a multiplier from comparables using annual rents, then applies it to the subject's monthly rent. The result is:

Why is the terminal capitalization rate usually set above today's rate?

Under a triple-net lease, who bears taxes, insurance and maintenance?

Net operating income is $84,000 and the market capitalization rate is 7%. The indicated value is: