Part 3 Intro to Income Capitalization Flashcards
_____________ is the conversion of income to value
Capitalization
3-39
GRM stands for:
Gross Rent Multiplier
3-40
____________ capitalization is a snapshot of one year whereas __________ capitalization is for a multiple year period of time
Direct
Yield
3-43
Economic principles that affect the income capitalization approach are
1 Highest ___ _______ ____
2 A__________
3 __________ and demand
4 S__________
5 B______
6 E____________
1 Highest and Best Use
2 Anticipation
3 Supply and demand
4 Substitution
5 Balance
6 Externalities
3-44
__________ gross income is the potential income attributable to property at full occupancy before vacancy and operating expenses are deducted
Potential
3-46
___________ gross income is the anticipated income from all operations after an allowance is made for vacancy and collection losses and an addition is made for any other income
Effective
3-46
____ __________ income is the actual or anticipated net income that remains after all operating expenses are deducted from effective gross income, but before mortgage debt Service and book depreciation are deducted
Net Operating Income
3-46
____-Tax Cash Flow is the portion of net Operating Income minus the mortgage debt Service but before income tax on operations is deducted
Pre
3-46
______-Tax Cash Flow is the portion of pre-tax cash flow that remains after all income tax liabilities have been deducted
After
3-46
___________ is a lump-sum benefit that an investor receives or expects to receive upon the termination or sale of an investment
Reversion
3-47
Reversion can also be stated as the ____ proceeds from sale at the end of the holding period
Net
3-47
The Capitalization Rate is used to convert ______ into value
Income
3-47
___________ rate is a rate of return on capital used to convert future payments or receipts into present value
Discount
3-48
