Part 6 Advanced Property Models and Supporting the Discount Rate

Question 1

What is the formula for R in the Property Model?
R=

Answer 1

R= Y − ∆ × a

Question 2

What is the formula for R in the Property Model with level income?

Answer 2

R = Y - ∆ × SFF

Question 3

What is the formula for R in the Property Model when the income and value increase or decrease by the same compound rate of change

Answer 3

R= Y - CR

Question 4

Will the Cap rate or the yield rate be higher when the
Value will rise?

Answer 4

Ro < Yo

Similar properties with upside potential tend to have low capitalization rates, and those with downside potential tend to have high capitalization rates.

Question 5

Will the Cap rate or the yield rate be higher when the
Value will stay the same (perpetuity)?

Answer 5

Ro = Yo

Question 6

Will the Cap rate or the yield rate be higher when the
Value will decline?

Answer 6

Ro > Yo

Similar properties with upside potential tend to have low capitalization rates, and those with downside potential tend to have high capitalization rates.

Question 7

Solve for Value Change: General

Answer 7

Question 8

Solve for Value Change: Level Income

Answer 8

Question 9

Solve for Value Change:
Same CR for Income and Value

Answer 9

Question 10

How to calculate ∆
with white keys?

Answer 10

n;i (CR);1CHS PV; FV?
1-
100x

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