Module 5,6&7

Question 1

gross lease

Answer 1

landlord pays operating expenses

Question 2

net lease

Answer 2

tenant pays operating expenses

Question 3

categorized rental payments

Answer 3

flat lease - payment do not change during the course of the lease
graduated lease - rents go up or down at specific points during the lease
revaluation lease - rents adjusted at a specific point during the lease based market rental rate of space
index lease - rent is adjusted periodically according to an index such as the CPI, cost of living
percentage lease - rent is based on the biz activity (retail sales) of tenant

Question 4

contract rent

Answer 4

identified in the lease
Note: est. a mkt rent- the probable rent that the property should bring in a competitive & open mkt used to determine if contract rent is above or below mkt

Question 5

scheduled rent

Answer 5

rent due under the lease often the same
Note: when calculating scheduled rent, adjust rent for concessions, discounts, or other benefits that induce a prospective tenant to enter into a lease

Question 6

effective rent

Answer 6

rent stipulated in a lease over a specified term minus concessions

Question 7

deficient rent

Answer 7

mkt rent exceeds contract rent

Question 8

excess rent

Answer 8

contract rent exceeds mkt rent

Question 9

average rent

Answer 9

percentage of rent paid over & above the guaranteed minimum or base rent contract rent; calcu as % of sales in excess of specified breakpoint sales volume

Question 10

fee simple interest

Answer 10

based on mkt rent the property is capable of achieving

Question 11

leased fee interest

Answer 11

based on existing contract rents for leased space & mkt rent for vacant & owner occupied space

Question 12

potential gross income

Answer 12

total rent possible if property pays 100% occupied
PGI-vacancy+collection loss=effective gross income

Question 13

egi

Answer 13

anticipated income from all operations of real property after an allowance is made for vacancy & collection losses. $$ the PM is expected to handle during the next 12 months or come to be collected during the next 12 months

Question 14

expenses

Answer 14

*fixed expenses - property taxes & insurance that must be paid regardless of occupancy or vacancy
*variable expenses - mgmt charges, utilities, repairs, or maintenance
*replacement allowance -roofing, carpet, boilers,& driveway

Question 15

total operating exp

Answer 15

fixed exp+variable exp

Question 16

quality design & construction

Answer 16

play a significant role in valuation
1) identify major components of the building
2) recognize the primary valuation issues to observe in each component

Question 17

components that appraisers should observe

Answer 17

1)foundation
2)framing (floor & wall supports)
3)roofing
4)plumbing
5)electrical wiring
6)HVAC

Question 18

foundation construction materials

Answer 18

*poured concrete
*insulated concrete forms
*concrete block
*permanent wood foundation
*fieldstone, rubblestone, & brick - old or historic residences

Question 19

3 types of foundation

Answer 19

*slab
*pier
*stem or basement wall

Question 20

slab foundation

Answer 20

poured concrete on ground level

Question 21

stem wall

Answer 21

a slab with add’l structural poured concrete support (either footings or grade beams) along its perimeter

Question 22

piers

Answer 22

poured concrete or wood floor elevated above ground (results in a crawl space)

Question 23

wall foundation

Answer 23

basement or crawl space is present & they form the structural foundation for upper floors of the structure

Question 24

foundation issues

Answer 24

*adequate drainage
*settlement cracks
*signs of termite
*any wood in contact with the ground
*moisture infiltration or chronic water problems

Question 25

framing systems

Answer 25

skeleton of building, what holds roof & walls
*wood, steel, & concrete

Question 26

wall covering materials

Answer 26

*paneling
*gypsum board
outside is covered by siding or masonry material

Question 27

common wall frames

Answer 27

2 types: platform construction & balloon construction

Question 28

platform frame

Answer 28

construction where wall frame sits on top of subfloor, each story built up as a separate unit

Question 29

balloon frame

Answer 29

studs extend from sill to roof; 2nd floor is supported by horizontal ribbon or ledger board & joists nailed to studs
More popular during WW2
Used today to build vaulted ceilings

Question 30

Other framing types

Answer 30

concrete block & stucco (CBS), structural insulated panels (SIPs), prefabricated walls, metal stud framing (common in commercial & industrial applications)
structural steel framing is common in high rise condominiums

Question 31

roofing

Answer 31

*flat roof - least expensive
*complex roof - steep or pitched roof, more expensive

Question 32

assessing roofs

Answer 32

*sagging rooflines or water damage
*adequate ventilation apparent
*condition of roof covering
*is flashing missing or damaged
*gutters in good condition

Question 33

common types of roof designs

Answer 33

*flat
*gable
*saltbox
*hip
*gamble
*mansard
*shed

Question 34

roof covering

Answer 34

composite shingle
wood shingle
wood shake
clay tiles
slate

Question 35

plumbing components

Answer 35

supply system - how water gets in & is distributed
septic - how waste water is collected, moved out of the building
mechanical - plumbing fixtures & appliances; water heaters, sinks, toilets, fixtures, & bathtubs

Question 36

private plumbing system

Answer 36

private well/septic system
prone to contamination
appraiser to ask owner of septic issues

Question 37

house design

Answer 37

*one story
*one and one half story
*2 story (include 2.5 story homes)…colonial, victorian, & modified 2 story
*split level (includes multilevel splits)…raised ranch, bilevel
*contemporary design (those that dont fit…modern, art deco, pueblo…in the prior 4 categories)
*specialized designs ..do not fit into the other categories…geodesic dome earth sheltered