In December 2026, appraiser Hannah Reed extracts a consistent GRM of 100 from three recent comparable rental sales. If the subject property's monthly market rent is $3,400, what value is indicated by the income approach?
Correct Answer
C) $340,000
Step 1: Use the extracted GRM of 100. Step 2: Value = Monthly Market Rent × GRM = $3,400 × 100 = $340,000. Because the multiplier is already market-derived, the calculation is a direct one-step application.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Homestead portability allows homeowners to transfer a portion of their accumulated homestead tax savings to a new homestead in the same state.
The income approach estimates a property's value based on the income it generates by converting net operating income into a value estimate using a capitalization rate. It is the preferred method for income-producing properties.
Many states have laws to limit how much property taxes can increase each year, regardless of market value fluctuations.
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Each of the following statements about a gross rent multiplier is accurate EXCEPT.
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In October 2026, appraiser Renee Walker is valuing a fourplex owned by Sam Lewis. One unit is leased to Sam's cousin at a rent far above what similar units in the area command. When applying the income approach, which rent figure should Renee rely on?