Chapter 11 - Appraisal Methods

Question 1

___________ is the process of converting income into value.

Answer 1

Capitalization

Question 2

Vacancy factor is the ____ in rents due to any cause. Commonly expressed as a percentage.

Answer 2

loss; so your vacancy factor increases while trying to find a new tenant or because of maintenance issues.

Question 3

Cost of capital (mortgage payments of principal or interest) IS / IS NOT an operating expense.

Answer 3

IS NOT

Question 4

Operating expenses include:

Answer 4

property taxes, insurance and licenses, manager fees, utilities, maintenance, repairs, and services, and replacement reserves

Question 5

High capitalization (cap) rate = high/low risk?

Answer 5

HIGH risk

Question 6

Low cap rate = ____ risk?

Answer 6

LOW risk

Question 7

_______ _______ is the money received from a property before any expenses are deducted.

Answer 7

Gross rent

Question 8

_________ is the process of selecting the most appropriate approach for the particle reappraisal job and giving it the most consideration in pinpointing the final value.

Answer 8

Correlation

Question 9

A Certified General License would deb needed to appraise a strip mall valued at approximately ____________

Answer 9

$540,000

Question 10

Trainee License and Residential License

Answer 10

150 hrs of education

Question 11

Certified Residential License

Answer 11

200 hrs of education and an Associates

Question 12

Certified General License

Answer 12

300 hrs of education and a Bachelors