Exam (elaborations)
REE 4103 final quizlet yay (1).
REE 4103 final quizlet yay (1).
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REE 4103 final quizlet yayIf a renewable lease option were found to be favorable to a tenant an appraiser: -
ANS-can assume the tenant would exercise the option to renew
Clarity and accuracy contribute to the: - ANS-
In determining income and expenses the first step is: - ANS-Lease and rent analysis
A lease clause that limits the expenses of the landlord is termed a: (select all the
answers that are correct) - ANS-expense stop clause and expense cap
The anticipated income that remains after deducting all operating expenses from
effective gross income but before mortgage debt service is: - ANS-net operating income
A rent survey reveals that apartment buildings offering one-bedroom units have a
considerably higher occupancy factor than those with two- bedroom units. If the subject
property includes only units with two bedrooms, the appraisal should probably project: -
ANS-A higher vacancy factor than found in the one-bedroom units
General payroll expenses: - ANS-include payments to all employees whose services
are essential to the property operation and management
Consider a property with potential gross income of $113,648, effective gross income of
$72,515, and operating expenses of $25,909. What is the net operating income? -
ANS-46606
Full recovery of amount invested is the: - ANS-Return of investment
In a high rise 100-unit apartment building there is a basement laundry area that brings
in $100 monthly from the concessionaire. The laundry income is: - ANS-Would
commonly be included as a miscellaneous income and added to the potential gross
income.
Effective gross income is income after an allowance for: - ANS-vacancy and collection
Lease renewals or extensions negotiated with existing tenants: - ANS-should be used
with caution
,The definition of market value assumes financing terms: - ANS-compatible with those
found in the market
A revaluation lease - ANS-Provides for increases in the rental rates based on
revaluation of the property value or rental rate by an appraiser
Consider a property with potential gross income of $103,574, effective gross income of
$77,324, and operating expenses of $31,533. What is the net operating income? -
ANS-45,791
If your capitalization rate is 12%, what is the value difference between a Net operating
Income of $36,096 and $52,507? - ANS-136,758.33
A property forecasted to produce $27,933 of gross income, and which sells for
$454,857 is said to have sold at a GIM of? - ANS-16.28
A lease on a 13,878 square foot industrial building, where the rent is specified as
$7,900/month, for a 9-year term with level income throughout 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? - ANS-6.26
A property has potential gross income of $108,092, effective gross income of $76,212,
and operating expenses of $44,418. What is the operating expense ratio? - ANS-0.58
A tenant who has an Exclusive Use Clause with a landlord, where the landlord later
allows a competing tenant in the same shopping center may: (select all answers that
are correct) - ANS-cancel its lease, sue the landlord for damages and prevent the
landlord from renting the space to the competitor
An allowance for vacancy and collection loss is estimated as a percentage of: -
ANS-potential gross income
Income capitalization techniques are are used the least in valuing: - ANS-single-family
residences
The operating expense ratio for income property is typically: - ANS-under 100%
The lump-sum benefit an investor receives upon termination of an investment is called: -
ANS-reversionary benefits
, Operating expenses used for valuation purposes generally do not include: -
ANS-depreciation expense
The most commonly used capitalization rate is: - ANS-overall rate
In applying gross rent multiplier analysis to the subject property, the appraiser would
use: - ANS-market rental
Gross income multipliers are generally considered part of: - ANS-the income
capitalization approach
The annualized rate of return on the capital generated or expected to be generated by
an investment over the period of ownership is called the: - ANS-internal rate of return
To obtain the present value of a series of incomes, a(n) ______________ rate is
applied. - ANS-discount
There are three recognized methods to provide for capital recovery in income
capitalization. In which method is capital recovered from the annual income reinvested
at the same rate as a loan is paid off? - ANS-income?
Which is not a yield rate? - ANS-interest rate
Current yield is: - ANS-Percentage or decimal rate that, when divided into a periodic
income amount, offers a lump-sum capital value for the income
The present value of all expected investment benefits minus the present value of all
expected negative cash flows, is the: - ANS-net present value
yield to maturity is: - ANS-unchanging with time
Final value estimates should be rounded to reflect the: - ANS-lack of precision
associated with an opinion
In reconciliation and conclusion of value, the appraiser should: - ANS-Provide argument
to justify the final conclusion of value rendered, discuss the reliability of the data used
and describe the relevance of each value approach explored
An oral appraisal report: - ANS-Is acceptable when the client requests it
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