REE Final Exam Questions With Correct
Answers
All are used in valuation of income-producing property except: - answerIncome tax
Capitalization is employed in the: - answerIncome approach - income properties
A gross lease is one that: - answerThe landlord pays for all operating expenses
When es...
EXAM STUDY MATERIALS July 30, 2024 11:26 AM REE Final Exam Questions With Correct Answers All are used in valuation of income -producing property except: - answer✔✔Income tax Capitalization is employed in the: - answer✔✔Income approach - income properties A gross lease is one that: - answer✔✔The landlord pays for all operating expenses When estimating the market value of an income -producing property, the appraiser will not consider - answer✔✔Income taxes attributable In income capitalization, value is measu red as the present worth of the - answer✔✔Net operating income divided by the overall capitalization rate Income capitalization techniques are not typically used in valuing: - answer✔✔Properties that do not generate income. The monthly rental being paid fo r a comparable rental property is called - answer✔✔Contract rent The procedure used to convert future benefits into present value is: - answer✔✔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 lease is described as ___________. - answer✔✔Fixed Lease The basic formula for property valuation via income capitalization is - answer✔✔Discounted Cash Flow Analysis V=I/R Which approach would probably be given the most weight in appraising a large office building? - answer✔✔Income Approach Which principle of value best affirms that value is the present worth of expected future benefits? - answer✔✔- Anticipation The appraisal approach that normally would be most useful in valuing investment property is the: - answer✔✔- Income Approach Value is said to be the present worth of future benefits. This defines the principle of: - answer✔✔Net present value EXAM STUDY MATERIALS July 30, 2024 11:26 AM The income capitalization approach supports what two basic methodologies? - answer✔✔- 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? - answer✔✔GIM=SP/Gross Annual Rental Income= 475,,000 = *8.6* These models discount the expected future income from property wi th any reversion value or sale proceeds to estimate the property's present (market) value: - answer✔✔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 typ e of lease? - answer✔✔Variable or step -up A lease which provides for rental changes annually tied to the consumer price index is what kind of lease? - answer✔✔Index Lease A lease which requires the landlord and tenant to arbitrate the amount of the lease u pon the tenant exercising a lease extension option is what type of lease? - answer✔✔- Reevaluation Lease The Landlord pays for all the expenses in a: - answer✔✔- Gross Lease The Landlord pays for only the structural repairs in what type of lease? - answer✔✔- Triple Net Lease In fee simple valuations, all rentable space is estimated at what levels? - answer✔✔Market Rent A lease on a 8,000 square foot industrial building, where the rent is specified as $3,500/month, for a 5 -year term with level income through out the lease 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? - answer✔✔3,500 x 11 (first month is free) = Total rent per year = 38,50 0 Total Rent per year / 8000 = *$4.81* per square foot per year 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 at the same time is $6.00/square foot. The lease with the landlor d is termed - answer✔✔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: - answer✔✔Deficit Rent The level of sales at which the percentage rent in a lease exactl y equals the base rent is called the - answer✔✔- Natural Breakpoint
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