11 - Income Capitalization Approach Flashcards

1
Q

The _______ _______ ________ is the relationship or ratio between the sale price or value of a property and it’s periodic gross rental income

A

Gross Rent Multiplier

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2
Q

T/F - The GRM is typically used for storage units and commercial properties

A

False
It is used for SFR’s and up to 4-unit properties

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3
Q

A GRM analysis is effective when the properties being compared have __________ operating Expense ratios

A - Similar
B - Equal
C - Different

A

Similar

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4
Q

Use ________ rent in the GRM, not the contract rent

A

Market

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5
Q

Market conditions (should)/(should not) effect the GRM

A

Should not
Since GRM is a ratio, it should remain fairly consistent as rent rates typically rise at the same rate as sale prices

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