Iaao course 102 - Study guides, Class notes & Summaries

IAAO Course 102- Review with Complete Solutions Anticipation Definition - ANSValue created by ghe expectationof benefits to be derived in the future Leverage Definition - ANSBorrowing of funds in hopes of earning a greater return than the cost of the borrowed funds- positive / negative / neutral Chattel Mortgage Definition - ANSMortgage only on personal property Effective Tax Rate Definition - ANSReflects the relationship between the real estate taxes and the value of property IRV formu...

Income Capitalization Approach (Capitalization Process) correct answers The value of an income producing property is estimated by converting anticipated benefits arising from the ownership of the income producing property. Components of the capitalization process are: correct answers value, net operating income, and capitalization rate Income capitalization is based on the economic principles of: correct answers Anticipation, Change, Competition, Substitution, Balance, Contribution, Supply...

IAAO Course 102- Review 2023 with Complete Solutions The Economic Principle of Anticipation - ANSstates that value is created by the expectation of benefits to be derived in the future. Chattel - ANSA mortgage on personal property. Balloon payment - ANSA payment on the balance due of a note at the end of the loan term that is in excess of the regular payment amounts. Usually found in a partially amoritized mortgage. Conventional mortgage - ANSA loan that is neither insured nor guaranteed...

IAAO Course 102- Review with Complete Solutions (VERIFIED BY EXPERT) the underlying principle providing the basis of the income capitalization approach is? - ANSanticipation Capitalization is the process used to: - ANSconvert income into an estimate of value the basic equation used in the income approach to value is: - ANSincome divided by rate equals value when market rent exceeds contract rent the difference is known as: - ANSdeficit rent (leasehold) if an income property has an ann...

The Economic Principle of Anticipation states that value is created by the expectation of benefits to be derived in the future. Chattel A mortgage on personal property. Balloon payment A payment on the balance due of a note at the end of the loan term that is in excess of the regular payment amounts. Usually found in a partially amoritized mortgage. Conventional mortgage A loan that is neither insured nor guaranteed by the federal government. Contract rent The actual rent paid in accordan...

IAAO Course 102- Review with Complete Solutions Surplus Produtivity - ANSAllows us to capitalize land income into an indication of value Return ON - ANSOverall Yield or Discount Return OF - ANSWasting Asset or Recapture Leverage - ANSThe borrowing of funds in hopes of earning a greater return than the cost of the borrowed funds Positive Leverage - ANSThis is achieved when funds are invested in property, which has a higher rate of return than the cost of borrowed funds Negative Leverage...

IAAO Course 102- Review with Complete Solutions Surplus Produtivity -ANS Allows us to capitalize land income into an indication of value Return ON -ANS Overall Yield or Discount Return OF -ANS Wasting Asset or Recapture Leverage -ANS The borrowing of funds in hopes of earning a greater return than the cost of the borrowed funds Positive Leverage -ANS This is achieved when funds are invested in property, which has a higher rate of return than the cost of borrowed funds Negative Leverage...

IAAO Course 102- FORMULAS Review with Complete Solutions (VERIFIED BY EXPERT) IRV - ANSIncome = Rate * Value Rate = Income / Value Value = Income / Rate VIF - ANSF = the gross income multiplier Value = Income * Factor Income = Value / Factor Factor = Value / Income Effective Tax Rate - ANSTax / Value Effective Rent - ANSLease Base Rent - Rent Concessions Gross Income Multiplier - ANSSales Price / Gross Income (VIF) Adjusted PGI - ANSPGI - Rent Concession Collection Loss Rate - ANS...

IAAO Course 102- Chapter 1 Review with Complete Solutions Income Approach - ANSOne of the three approaches to value in which the appraiser derives a value indication by converting ANTICIPATED benefits through ownership of income producing property. As an investor analyzes various opportunities what will he or she consider? - ANS1. How much will it cost? 2. How much will I get back? 3. When will I get it back? 4. What are the risks? 5. What is the return of a real estate investment com...