REAE 3325 Ch 8 Questions and Answers (Graded A)REAE 3325 Ch 8 Questions and Answers (Graded A)REAE 3325 Ch 8 Questions and Answers (Graded A)REAE 3325 Ch 8 Questions and Answers (Graded A)
The use of comparable property sales information and their respective 1st year NOI to calculate the overall c...
the use of comparable property sales information a
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REAE 3325 Ch 8 Questions and Answers
(Graded A)
The use of comparable property sales information and their respective 1st year NOI to
calculate the overall capitalization rate is called the - ANSWER-direct market extraction
method
Which of the following would NOT be considered a capital expenditure - ANSWER-
changing the locks for a new tenant
A property is under long-term leases to financially reliable tenants at below-market
rents. The appraiser of this property would estimate the PGI based on - ANSWER-the
actual contract rents
An appraiser may determine the value of small income-producing properties by using a
variant of the direct income capitalization method known as the ____________ approa -
ANSWER-income multiplier
If capital expenditures are subtracted from revenues to determine the NOI, the
treatment of the CAPX is said to be - ANSWER-above-line
sequence of adjustments matters when - ANSWER-percentage adjustments are
involved
sequence of adjustments does not matter when - ANSWER-all adjustments are in dollar
amounts
An income property is for sale for $750,000. What is the minimum NOI required to justify
that price if the required cap rate for an investor is 9% - ANSWER-Given the sale price
and required cap rate, we can solve for the minimum NOI by multiplying the price by the
required cap rate. $750,000 x 9% = $67,500.
In sequence of adjustment what is the second adjustment to consider? - ANSWER-
Market Condition
In sequence of adjustment what are the last 3 adjustment to consider? - ANSWER-
Location, physical character, non reality items
The annual property taxes on an income property are considered a _______ expense -
ANSWER-fixed
The overall capitalization rate is also known as the - ANSWER-going-in cap rate
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