Ch 9 Quiz Flashcards
True or False: If a property is rented, its market rent is always the same as its contract rent.
FALSE
____________ expenses are “operating expenses that generally do not vary with occupancy.”
Fixed
_____________ rent is defined as ”the actual rental income specified in a lease.”
Contract
“A method used to convert future benefits into present value by discounting each future benefit at an appropriate yield rate or by developing an overall rate that explicitly reflects the investment’s income pattern, value change and yield rate” is the definition of
yield capitalization
“A ratio of one year’s net operating income provided by an asset to the value of the asset” is the definition of
capitalization rate
“The actual rental income specified in a lease” is the definition of
contract rent
“The amount by which market rent exceeds contract rent at the time of the appraisal” is the definition of _____________ rent.
deficit
“The periodic expenditures necessary to maintain the real estate and continue production of the effective gross income, assuming prudent and competent management” is the definition of _______________ expenses.
operating
“A ratio of one year’s net operating income provided by an asset to the value of the asset” is the definition of _________ rate.
capitalization
“The amount by which contract rent exceeds market rent at the time of the appraisal” is the definition of ________________ rent.
excess
“The income due under existing leases” is the definition of _______________ rent.
scheduled. Scheduled rent is defined as “Income due under existing leases.” This is very similar to contract rent except that it refers to the rent due for the entire property not just in one lease. Contract rent refers to the rent in a specific individual lease contract. Scheduled rent can also include the market rents for vacant units when preparing an income/expense projection for a property.
“The relationship between a single year’s net operating income expectancy and the total property price or value” is the definition of a(an) ______________ rate.
overall capitalization
A 12 unit apartment building has 6 units rented at $900 per month and 6 units rented at $1,050 per month. What is its gross income?
140400
A 32 unit apartment building has 12 units rented at $900 per month, 12 units rented at $1,100, and 8 units rented at $1,300 per month. What is its gross income?
412800
A comparable sale sold for $5,495,000. It had an NOI of $605,500. What is the indicated capitalization rate from that sale?
0.11