License Math 2 Flashcards
Appraisal & Value
1
Q
Gross Income Multiplier (
A
Sales Price / Annual Income
2
Q
Cost Approach method of appraisal
A
Value = Land value + (Improvements + Capital additions - Depreciation)
3
Q
Depreciable basis
A
(Initial property value + capital improvements - Land Value)
4
Q
Annual Depreciation
A
Beginning depreciable basis / Depreciation term (in years)
5
Q
Income Capitalization Formula (Cap Rate)
A
Capitalization rate = Annual Net Operating Income / Value
6
Q
Net Operating Income (NOI)
A
NOI = Potential rent - vacancy + Otherer income - Operating expenses
