Math (Market Value and Apraisals) Flashcards
Using the cost approach of appraisal, what will be the market value of a property with a 50,000 square foot building if construction costs new are $48 per square foot, land value is $900,000, and total depreciation on the structure to date is estimated to be 10%?
(1) $3,105,000
(2) $3,060,000
(3) $3,000,000
(4) $3,300,000
2
500,000X$48
=2,400,000.00
2,400,000-10%=2,160,000.00
2,160,000+900,000
=3,060,000.00
Using the cost method of appraisal, what will be the market value of a property with a 50,000 square foot building if construction costs new are $50 per square foot, land value is $750,000, and total depreciation on the structure to date is estimated to be 10%?
(1) $3,250,000
(2) $2,500,000
(3) $3,000,000
(4) $2,250,000
3
the cost method equation is..
Property Value = Land Value + (Cost New – Accumulated Depreciation)
75,000 + (2500,000(50X50,000) - 10%)
=3,000,000
Using the cost method of appraisal, determine the market value of a property with a 37,000 square foot building if construction costs new are $62 per square foot, land value is estimated to be $1,200,000, and total depreciation on the building to date is estimated to be 8% ?
(1) $2,294,000
(2) $3,310,480
(3) $3,494,000
(4) $3,214,480
2
27,000(square ft) X $62
=2,294,000.00
+1,200,000(land)
=$3,310,480
Wally Walters wants to determine the market value of his property. Unfortunately, he lives in a sparsely inhabited region where there are no recently-sold, similar properties. However, he does know that the replacement cost (new) of his 2,600 square foot house is $42.50 per square foot. The land value estimate using the comparative method of appraisal is $41,500.
Mr. Walters has not taken adequate care of his house: it has depreciated in value. There has been $16,300 of curable physical depreciation. In addition, the bathroom and kitchen fixtures are outdated; their replacement cost is $13,200.
Based on the above information, what is the market value of Mr. Walters’ property?
(1) $122,500
(2) $81,000
(3) $152,000
(4) $135,700
1
2,600 X 42.50 = 110,500.00
110,500-16,300-13,200
=81,000+41,500(land)
=$122,500.00
Fred Jones wants to determine the market value of his property. Unfortunately, he lives in a sparsely inhabited region where there are no recently-sold, similar properties.
However, he does know that the replacement cost (new) of his 1,350 square foot house is $38.50 a square foot. The site value estimated using the comparative method of appraisal is $37,500.
Mr. Jones has not taken adequate care of his house and it has depreciated in value. There has been $12,200 of curable physical depreciation. In addition, the bathroom and kitchen fixtures are outdated; their replacement cost is $6,300.
Based on the above information, what is the market value of Mr. Jones’ property?
(1) $51,975
(2) $89,475
(3) $70,975
(4) $77,275
3
31,350 X 38.50 =51,975.00
$51,975.00 + $37,500
=$89,475.00
-12,200
-6,300
=$70,975.00
You are determining the market value of a subject property using the capitalization process. The gross potential rent for the subject property is $430,000, operating expenses are $130,000, and the long-term vacancy rate is 4%. If immediate repairs of $65,000 are required on the property and the appropriate capitalization rate is 6%, the market value of the property is approximately:
(1) $4,713,000
(2) $3,630,000
(3) $2,900,000
(4) $4,648,000
4
KEY THING ON THIS ONE, YOU DONT FACTOR THE IMMEDIATE REPAIR UNTIL AFTER YOU HAVE DONE ALL THE CALCULATIONS!
find NOI for the subject property using the information given
cap rate = 6%
so what is the NOI?
the long term vacancy rate = 4%
NOI = 430,000 - 4% - $130,000 = 282,800
sale price = NOI / market yield
sales price = 282,800 / 6% (capitalization rate) =$4,713,333
then at the end subtract “immediate repairs”
market value = 4,713,333 - $65,000 = 4,648,333 rounded to the $4,648,000
The potential buyer of an apartment block has asked an appraiser to do an appraisal of the apartment block in order to determine its market value. The following information has been made available to the appraiser: estimated gross realized income is $44,200; estimated long-term vacancy allowance is 4%; estimated annual operating expenses are $17,850. In addition to this information, the appraiser has found a similar property with an effective annual yield of 7.85%.
Given the above information, the final estimate of value for the subject property (rounded to the nearest
$1,000) on the date of valuation is:
(1) $329,000
(2) $307,000
(3) $323,000
(4) $336,000
4
i think what makes this one confusing is thta vacancy allowance must be different than vacancy rate so i think we dont factor it in. because…
44,200 - 17,850 = 26,350/7.85%
=335,668.78
rounded up = 336,000
As an appraiser working for a large investment firm, you have been asked to determine the value of a small commercial building which produces a net operating income of $48,700 per annum. If the market capitalization rate for similar investments is j1 = 20%, the market value of the property is:
(1) $243,573.21
(2) $240,000.00
(3) $243,500.00
(4) impossible to calculate with information given.
3
48,700/20% = 243,500
