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REE 4103 Practice Questions (1)
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REE 4103 Practice Questions (1)
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REE 4103 Practice QuestionsAll are used in the valuation of income producing property except: - ANS-income taxes
Capitalization is employed in the: - ANS-Income approach- income properties
A gross lease is one that: - ANS-the landlord pays all the operating expenses of the
property
When estimating the market value of an income producing property, the appraiser will
not consider: - ANS-Income Taxes Attributable
In income capitalization, value is measured as the present worth of the: -
ANS-NOI+Reversion
Income capitalization techniques are not typically used in valuing: - ANS-Properties that
do not generate income
The monthly rental being paid for a comparable rental property is called: - ANS-Contract
Rent
The procedure used to convert further benefits into present value is: - ANS-Yield
Capitalization (Discounted Cash Flow Models)
When the landlord permits the tenant occupancy and use of the space each year for a
fixed amount of money, the leased is described as: - ANS-Fixed
The basic formula for property valuation via income capitalization is: - ANS-V=I/R
Which approach would probably be given the most weight in appraising a large office
building? - ANS-Income Approach
Which principle of value best affirms that value is the present worth of expected future
benefits? - ANS-Anticipation
The appraisal approach that would normaly be most useful in valuing investment
property is the: - ANS-Income Apraoch
, Value is said to be the present worth of future benefits. This defines the principle of: -
ANS-Net Present Value
The income capitalization approach supports what two basic methodologies? -
ANS-Direct Capitalization
Yield Capitalization
A property forecasted to produce $55,000 of gross income, and which sells for
$475,000 is said to have sold at a GIM of? - ANS-8.63
These models discount the expected future income from property without any reversion
value or sale proceeds to estimate the property's present (market) value? -
ANS-Discounted Cash Flows
A lease with the following annual payments: Year 1: $10,000 Year 2: $12,000 Year 3:
$14,000 Year 4: $16,000 would be called what type of lease? - ANS-Step Up lease
A lease which provides for rental changes annually tied to the CPI is what kind of lease?
- ANS-Index Lease
A lease which requires the landlord and tenant to arbitrate the amount of lease upon the
tenant exercising an extension option is what type of lease? - ANS-Reevalution
The landlord pays for all the expenses in a - ANS-gross lease
the landord pays for only structural repairs in what type of lease? - ANS-Triple Net
In fee simple valuation, all rentable space is estimated at what levels? - ANS-Market
A lease on an 8000 square foot industrial building, where the rent is specified as
$3,500/month for a 5 year term with level income throughout the least term. When the
lease was negotiated, the tenant received free rent for the first month of each year as a
concession. What is the effective rent per square foot per year? - ANS-4.81
At the time of an appraisal a warehouse is leased to a quality tenant for 9.00/square
foot. The rent obtainable in the market is 6.00/square foot. The lease with the landlord is
termed a: - ANS-negative leasehold
Rent pursuant to a lease that is paid over and above the guaranteed minimum based on
gross sales of a retail tenant is called: - ANS-deficit rent
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