When applying the income approach to value Florida investment properties, an appraiser must consider all of the following income and expense items EXCEPT:
Correct Answer
A) Mortgage principal and interest payments
Mortgage principal and interest payments are financing costs specific to individual owners and are not included in the calculation of Net Operating Income (NOI), which reflects the property's income-generating capability independent of financing. Vacancy and collection losses reduce effective gross income. Property management fees and property taxes/insurance are legitimate operating expenses included in NOI calculations.
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A Miami Beach appraiser is valuing a luxury condominium in a building where 60% of units are owner-occupied and 40% are short-term vacation rentals. The HOA allows both uses. For the sales comparison approach, what type of comparable sales should receive primary consideration?
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An appraiser in Tallahassee is valuing a 1920s historic home that has been converted to professional offices near the state capitol. The property has historic designation restrictions on modifications. Which approach would likely require the most careful consideration of these restrictions?